There may be real foreclosure assistance available for homeowners that are in danger of losing their homes. Since the foreclosure rates have been increasing at an alarming speed, the president, congress, and the federal government signed a bill that was designed to assist 400,000 homeowners with foreclosure prevention.
The Federal Housing Administration (FHA) Hope for Homeowners Program went live on October 1, 2008 and will end on September 30, 2011
What the Hope for Homeowners act does for you
The Hope for Homeowners act will help homeowners that are getting close to foreclosure or are currently in foreclosure. It can also provide foreclosure assistance to homeowners who are burdened with a high interest rate mortgage loan.
Many people are feeling the effects of the sub-prime mortgage loans that allowed people to qualify for mortgage loans that were unable to qualify for prime mortgage loans. While these loans made it possible for more people to enjoy home ownership, it burdened them with very high interest rates.
Foreclosure prevention available for many
The Hope for Homeowners Program may provide foreclosure prevention to many families. All homeowners who qualify for this foreclosure assistance program will be required to accept a thirty year fixed rate mortgage. Absolutely no other types of loans will be approved.
If approved for this program the FHA will lend up to ninety percent of the current value of your home. This means that if you purchased the home for a price higher than what your home is currently worth and your loan amount is higher than the value of your property, your loan could be approved for just 90% of the current value of the home.
This could help homeowners that are upside down with their mortgage due to the falling value of homes. The lender must agree to take the loss on the difference. Most will do so since the loss would be much greater if a homeowner goes into foreclosure and is put up for sale on the retail market. If this happens, they will likely realize a greater loss than if they accept the buyout offer of an FHA approved loan.
The FHA wants to keep homeowners in their houses. They know it is better to loan the homeowner money rather than allowing them to go into foreclosure. The Hope for Homeowners Program is intended to help the rapidly degrading housing market.
Costs associated with the H4H foreclosure assistance
Homeowners will be required to pay for the FHA appraisal. This will usually cost between $350 and $500. A current appraisal is required for the loan approval and closing.
It appears that the FHA has more liberal underwriting guidelines than other lenders, looking more at a person’s ability to pay rather than their credit score. They understand that homeowners who are in foreclosure are likely having trouble paying other financial obligations as well.
Many lenders are working with homeowners and providing foreclosure assistance. Many lenders are doing loan modifications in an effort to lessen their losses in this housing crisis. If you are a homeowner that is looking for foreclosure prevention programs the Help for Homeowners could be the answer you are looking for.
Applying for the Hope for Homeowners program
To get this type of foreclosure assistance through the H4H act, you have to contact your lender or another FHA approved lender to find out if they are participating in the Hope for Homeowners program.
If you feel you still need more information, you may want to contact a housing counselor approved by the FHA as well.
Keep in mind that to get his type of foreclosure assistance offered by the FHA you should start working on it as soon as possible.