In a message dated 10/22/2008 12:42:46 A.M. Eastern Daylight Time, [EMAIL PROTECTED] writes:
I've not seen it anywhere printed that the FHA won't buy the whole loan when the banks won't compromise, leaving the home owner with no recourse. $700 billion bailout vs. $300 billion (FHA) Silicon Valley Real Estate Examiner: Excerpts from http://tinyurl.com/5y7seu Voluntary provisions for hope H4H is already up and running. It may take some time for lenders to gear up for the new FHA loans, but the provision's mechanics are clear and in place. U.S. Department of Housing and Urban Affairs' "Hope For Homeowners" fact sheets spell out the details. • The refinanced, 30-year, fixed rated FHA mortgages in the H4H program are for home owner-occupants (with no additional ownership interest in another home, say, a second home) having difficulty making their payments. • Banks are not mandated to write the loans, but can volunteer to write down an existing mortgage to 90 percent of the new appraised value of the home. Any holders of existing mortgage liens must waive all prepayment penalties and late payment fees and release the liens. The existing first mortgage holder has to accept the Hope for Homeowners loan as full settlement of all outstanding indebtedness. • The existing mortgage must have been originated on or before January 1, 2008, and the owner must have made at least six payments. • As of March 2008, the home owner's total monthly mortgage payments due must be more than 31 percent of the household's gross monthly income. • The loan amount on the new H4H mortgage cannot exceed $550,440. The amount can include a financed 3 percent "Upfront Mortgage Insurance Premium" and other loan costs. The home owner must also pay a 1.5 percent annual mortgage insurance premium. • The home owner cannot take out a second mortgage for the first five years of the new loan, except under certain emergency conditions. • The borrower must agree to share with the FHA, both the equity created at the beginning of the new mortgage and any future appreciation in the value of the home. If the home is sold or refinanced, the homeowner will share the equity with FHA on a sliding scale ranging from a 100 percent FHA share after the first year to a minimum of 50 percent after five years. The FHA will share a portion of equity earnings, when available, with past lien holders until any available appreciation is exhausted. Any left over appreciation goes to the FHA. Some experts say the FHA equity sharing deal is one of the best mortgage ideas to come out of Washington, D.C. since the Great Depression. Nicholas isn't so sure. Nicholas says a second "Hope" provision for suffering home owners, Section 1403, is a better deal because it comes with mandates. A better hope? Under Section 1403, mortgage servicers are encouraged to modify loans for home owners and help them avoid foreclosure as long as three requirements are met: 1. A default on the mortgage either has already happened or is "reasonably foreseeable." 2. The home owner is living in the property as his or her primary residence. 3. The lender is likely to recover more through the loan modification or workout than by forcing the home owner into foreclosure. However, it's up to the home owner to prove, in writing, his or her case to the lender and that could take some negotiating, even legal wrangling. "It may be advisable to consult with an attorney -- especially if you qualify for a loan modification under the law and your lender still refuses to work with you," Nicholas said. To help home owners make their case, Nicholas offers a sample letter containing more assistance, and tips to help home owners negotiate a loan modification. The advice? • Deal directly with a representative of the lender's "loss mitigation" or workout department, not a broker, loan originator or other mortgage staffer. • Write a hardship letter demonstrating job loss, serious medical condition, balloon payment coming due, adjustable rate reset or some other financial calamity that will make it impossible for you to continue making your mortgage payments as scheduled. By law, you must be in imminent danger of default in order for lenders to be compelled by law to help you. • Send the lender your financial statements, employment records, tax returns and bank statements demonstrating how you would be able to afford the modified loan terms under your present financial circumstances. • Send the lender a current appraisal of your home or some documentation on recent comparable sales in your neighborhood demonstrating the current value of your home. "The key is to demonstrate how the lender is likely to recover less money through foreclosure than they would by working with you in your proposed loan modification plan," Nicholas said. **************Play online games for FREE at Games.com! All of your favorites, no registration required and great graphics – check it out! 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