Hartford, CT – October 06, 2008 – (RealEstateRama) — Senator Chris Dodd (D-CT), Chairman of the Senate Banking, Housing, and Urban Affairs Committee, today announced the enactment of the HOPE for Homeowners program, a voluntary initiative to help distressed borrowers refinance their mortgages. HOPE for Homeowners was established as part of the Housing and Economic Recovery Act (HERA), comprehensive housing legislation that Senator Dodd authored along with Senator Richard Shelby (R-AL) and Congressman Barney Frank (D-MA). HERA was passed by Congress and signed into law by President Bush in July.
“Each day, more and more American families and communities are forced to cope with the devastating effects of foreclosure. Starting today, many Americans who are struggling to keep their homes will have a new tool at their disposal – HOPE for Homeowners. This program will enable hundreds of thousands of American families who are trapped in bad loans – often the result of predatory lending practices – to convert their mortgages into new, affordable loans. With mortgages they can afford, homeowners will be better equipped to keep their homes and stave off foreclosure.
“HOPE for Homeowners is a major step forward in our efforts to address the root cause of our economic crisis – the foreclosure crisis. I will continue to monitor very closely the effectiveness of this program in preserving homeownership. When Congress passed the Housing and Economic Recovery Act, we sent a message to Americans that help was on the way. For hundreds of thousands of American families, today’s enactment of HOPE for Homeowners means that help has finally arrived.”
More information about the HOPE for Homeowners program:
Where should homeowners go to seek help through HOPE for Homeowners?
Homeowners initiate the process. Those in trouble or behind on their mortgage payments should immediately call 1 (800) CALL-FHA, visit www.FHA.gov or speak to a counselor from a local community housing group to determine the best course of action.
Who is eligible for help through HOPE for Homeowners?
Homeowners who are behind on their mortgage payments for their primary residence are probably eligible. Homeowners must certify that they have not intentionally defaulted on their loans. Loans must have originated earlier than 2008. And borrowers are required to retire any debt on the home (such as home equity line of credit).
This is a voluntary program – will lenders want to participate?
Lenders have a strong incentive to participate. Even though the program is voluntary and lenders will have to take significant losses to benefit from the program, these losses would be far less than they would incur if the property enters into foreclosure. Borrowers may use any government-approved lender, as long as their current lender or investors agree to take the write-down in value.
