FHA secure & HOPE for Homeowners (H4H)

HOPE for Homeowners Program

The Housing and Economic Recovery Act of 2008 amends the National Housing Act to authorize a new temporary FHA mortgage insurance program called the HOPE for Homeowners (H4H) Program. Under this Program, certain borrowers facing difficulty in paying their mortgages will be eligible to refinance into affordable FHA-insured mortgages.  The H4H Program is effective on or after October 1, 2008 through September 30, 2011.

This is a program designed to help borrowers get out of their existing mortgage EVEN IF you are late or in foreclosure! With these programs we can help you save your home and get into an affordable fixed rate mortgage that you deserve. Five Stars Mortgage is proud to offer this program to our Florida clients and also our client's Nationwide. Below we offer the details of this newly enacted mortgage bailout program. We look forward to helping you save your homes and survive these troubling times with pride and confidence!

Determining Eligibility

Borrower Eligibility - Borrowers who are current or delinquent on their mortgage at the time of the refinance are eligible for this Program, if they:    

• Have not intentionally defaulted on their mortgage or any other debt (Intentionally defaulted means the borrower had available funds that could pay the mortgage and other debts without hardship.  Debts subject to a documented bona fide dispute may be excluded.)

AND

• Have made a minimum of six (6) full payments during the life of the existing senior mortgage (full payment is defined as what was acceptable to the lender for meeting the monthly payment obligation under the terms and conditions of the mortgage).

• Borrowers must reside in the property securing the loan being refinanced, and may not have an ownership interest in other residential real estate, including second homes and/or rental properties.
• As of March 1, 2008, the borrower's total monthly mortgage payment debt-to-income ratio (DTI) on all existing mortgages must be greater than 31% of the borrower's gross monthly income.

Mortgage Eligibility

• The mortgage being refinanced must have been originated on or before January 1, 2008
•  Each holder of an existing senior mortgage being refinanced must

1.      Waive all prepayment penalties and late payment fees (including insufficient funds fees) on the mortgage.  Prepayment penalties are defined in the Federal Reserve Board's Regulation Z (Truth in Lending), 12 CFR 226.32(d)(6)

2.      Agree to accept the proceeds of the new H4H mortgage as payment in full, and

3.      Release their outstanding mortgage liens.

• Each holder of an existing subordinate mortgage must:

1.      Waive all prepayment penalties and late payment fees (including insufficient funds fees) on the mortgage.  Prepayment penalties are defined in the Federal Reserve Board's Regulation Z (Truth in Lending), 12 CFR 226.32(d)(6); and

2.       Release their outstanding mortgage liens.

• Any type of mortgage is eligible for refinancing under the H4H Program, including conventional (prime, Alt-A, subprime) or government-backed (FHA, VA, or Rural Development), fixed-rate or an adjustable rate mortgage; and
• The mortgage being refinanced may have a variety of payment characteristics, including interest only, payment option, negative amortization and/or any other exotic features.

Property Eligibility

• The property must be the borrower's primary and only residence in which they have an ownership interest
• Only 1 unit properties are eligible, including condominium units, cooperative units and manufactured housing permanently affixed to realty.  

                 Term and Interest Rate on the H4H Mortgage

Only 30-year term, fixed-rate mortgages may be offered under this Program.  While the interest rate on the new mortgage is to be negotiated between the borrower and the lender, lenders should offer rates that are commensurate with interest rates on similar types of loans

Calculating the Maximum Mortgage Amount

The amount of the H4H mortgage may not exceed a nationwide maximum mortgage limit of $550,440.  The LTV of the H4H mortgage is limited to 90 percent of current appraised value of the property, including the UFMIP.  The proceeds from the new H4H mortgage will be applied to the existing senior mortgage, and extinguish all mortgage-related debts under all existing mortgages including: 

• Advances by existing lenders/servicers for taxes, hazard insurance and/or mortgage insurance; and
• Out of pocket third party legal expenses of the existing lenders/servicers associated with foreclosures and preservation and protection (See Mortgagee Letters 2007-03 and 2005-30)

MORTGAGE PROGRAMS