|
Under the HOPE for Homeowners Act, the Federal Housing Administration (FHA) has been granted additional authority to insure up to $300 billion of mortgages to refinance loans headed for foreclosure.
According to HUD, the general HOPE for Homeowners Act eligibility requirements are as follows:
- You need to have originated your troubled loan or loans on or before January 1, 2008.
- The loans you want to refinance must be on your primary residence. Vacation homes and investment properties are ineligible.
- You must certify that you have not intentionally defaulted on an existing mortgage, and did not obtain the existing loan fraudulently.
- You must not have been convicted of fraud.
- You will need to verify your income, which many borrowers did not have to do in recent years.
- Before participating in this program, all subordinate liens must be extinguished. This will have to be done through negotiation with the first lien holder.
- As of March 1, 2008, your monthly housing payment (including the principal on all your various mortgage payments, interest, taxes and insurance) has to have been at least 31 percent of your monthly household income. So if you were earning $5,000 a month and had housing payments of $3,000, you are eligible. But if your payments were just $1,400, you are not eligible.
The program is completely voluntary for lenders, investors, loan servicers, and borrowers. So, lenders are not required to give you a better deal under the new law, even if you do meet the qualifications.
|
