Flexibility for "Hope For Homeowners" Program Just Announced

WASHINGTON - U.S. Housing and Urban Development (HUD) Secretary Steve Preston today announced that the HOPE for Homeowners (H4H) Board of Directors has approved changes to the program to help more distressed borrowers refinance into affordable, government-back mortgages. The changes will reduce the program costs for consumers and lenders alike while also expanding eligibility by driving down the borrower's monthly mortgage payments.

"Clearly, meaningful changes were needed. These modifications should increase lender participation and help more families who are having difficulty paying their existing mortgages, but can afford a new affordable loan insured by HUD's Federal Housing Administration," said Preston.

By taking full advantage of the new authority provided under the Emergency Economic Stabilization Act (EESA) of 2008, HOPE for Homeowners will provide additional mortgage assistance to struggling homeowners.

Modifications to HOPE for Homeowners include:

* Increasing the loan to value ratio (LTV) to 96.5 percent for some H4H loans;
* Simplifying the process to remove subordinate liens by permitting upfront payments to lienholders; and
* Allowing lenders to extend mortgage terms from 30 to 40 years.

"These changes will further encourage lenders to take a hard look at this program before heading down the path to foreclosure and will provide families with another resource to refinance into a loan they can afford," said FHA Commissioner Brian D. Montgomery. "HOPE for Homeowners will continue to serve as another loss mitigation tool that can be used to help families keep their homes." (Ref: HUD No. 08-178)

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See also: http://www.hud.gov/hopeforhomeowners/index.cfm

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