For Immediate Release
October 1, 2008 |
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FOR MORE INFORMATION:
Cullen Schwarz
Office: 202.225.4961
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Federal Mortgage Refinancing Program Comes into Effect
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“Hope for Homeowners” Will Help Struggling Homeowners Refinance into Affordable Mortgages |
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(Washington D.C.)- The Housing and Economic Recovery Act of 2008, signed into law on July 30, includes a number of provisions to address the mortgage crisis and help homeowners facing foreclosure. At the heart of the legislation is a program called Hope for Homeowners, which authorizes the Federal Housing Administration (FHA) to insure up to $300 billion in refinanced loans. The program brings affordable, sustainable mortgages within reach for qualified homeowners whose lenders are willing to refinance based on the home’s current value. The new program begins October 1, 2008, and will be available for three years.
“The housing crisis threatening American families is at the heart of our country’s larger economic problems. We will not be able to get a handle on this crisis unless we find a way to stem the tide of mortgage foreclosures,” said Rep. Levin. “Through this new effort, the federal government is doing its part to encourage lenders to refinance unaffordable loans and keep families in their homes. Now we need home lenders to step up and do their part.”
Borrowers seeking to refinance under the Hope for Homeowners program must be owner-occupants who originated their mortgage on or before January 1, 2008. They must have a monthly mortgage payment greater than 30% of total monthly income, and they must demonstrate that the current loan is unaffordable. Borrowers must certify that they have not intentionally missed mortgage payments and did not obtain the existing loan fraudulently. Investors, speculators, or borrowers who own second homes may not participate in the program.
Under the program, borrowers would enter a 30-year, fixed-rate mortgage backed by the FHA. The maximum amount of the new mortgage would be $550,440, with a loan-to-value ratio of no more than 90%. A new appraisal would be performed by an FHA-approved appraiser. The new mortgage will include no prepayment penalties, but the FHA would receive at least a portion of any profit from reselling the home within five years.
Lender participation in the refinancing program is voluntary. The aim of the Hope for Homeowners program is to give lenders an option that is backed by the federal government and makes more sense financially than foreclosure. Many foreclosures have occurred simply because lenders do not have an alternate system for dealing with delinquent borrowers. Hope for Homeowners provides a framework for lenders to deal with mortgages that might be in trouble.
To learn more about the Hope for Homeowners program and its qualifications, homeowners may call 1-800-CALL-FHA (225-5342) or visit www.fha.gov. They may also contact the HOPE NOW Alliance at 1-888-995-HOPE or find a local HUD-approved housing counseling agency by calling 1-800-569-4287. Examples of HUD-approved housing counselors in Macomb and Oakland County include:
GreenPath
888-860-4167 (toll-free)
Offices in Roseville, Southfield, and Troy
Michigan State University
Extension Services
586-469-5180
Clinton Township
Christian Credit Counselors
800-557-1985 (toll-free)
Southfield
Oakland County Housing Counseling
888-350-0900 (toll-free)
Pontiac
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To Contact Congressman Levin: -
Email Congressman Levin In Michigan: 27085 Gratiot Ave, Roseville, MI 48066 | (586) 498-7122 | (248) 968-2025
In Washington: 1236 Longworth House Office Building, Washington, DC 20515 | (202) 225-4961
