Well, again we need to ask ourselves how many times the government has tried to fix something only to have little effect or even make the situation worse?  Enter the “Hope for Homeowners act of 2008″ (HUD refers to this as H4H).   Realtors, how did your last Short Sale go?  It’s a fair question because with the HOPE program we are asking the same loss mitigation departments to write-off the portion of the principal balance that is “upside down”.  The only difference is that the end result will be a new loan at 90% LTV instead of the sale of the property.  Is there any reason to believe that loss mitigation will be any more willing to write-off the thousands of dollars needed for the benefit of a refinance as apposed to a sale?   Another factor is that the lender will end up only about 85% of the current value of the property.  How is this?  Because it is a refinance with closing costs, and assuming the person in question qualifies for the HOPE refinance, they will most likely not have the $$ needed to pay for the closing costs & pre-paid items.  So a 90% LTV = 85% to the bank + approx 5% for closing costs.  Also, the Up-Front mortgage Insurance, which is currently 1.75% for a regular FHA loan, will be 3.00% for the HOPE loan!  The monthly mortgage insurance, which is normally .55% for a regular FHA loan, will be 1.5% for the HOPE loan!   I know there are a lot of people HOPEing this will be a solution to help our ailing housing market, I must at the very least be a skeptic.   Details about HOPE for Homeownership act.

President Barack Obama’s new mortgage relief plan, unveiled recently, aims to help up to 9 million borrowers qualify for more affordable mortgages and stay in their homes. Still however, the million dollar question continues to linger in the minds of many homeowners. “Will it help me?” Obama’s “Making Home Affordable” program is designed to work with lenders to modify the loan terms for up to 4 million homeowners and to refinance up to 5 million homeowners into more affordable fixed-rate loans. Here are some questions and answers about the latest round of aid for homeowners. A: How do I know if I qualify for the refinancing plan? Q: Only homeowners in good standing whose loans are held by Fannie Mae or Freddie Mac qualify. The property must be owner-occupied and the borrower must have enough income to make payments on the new mortgage debt. Borrowers can’t owe more than 105 percent of their home’s current value on their first mortgage. For example, if your home is worth $200,000, your first mortgage can’t exceed $210,000. Borrowers with a second mortgage still can qualify as long as their first mortgage isn’t more than 105 percent of their home’s value. Homeowners can’t take cash out during the refinancing to pay other debt. Borrowers have until June 2010 to apply for the program. Q: How do I know if my mortgage is owned by Fannie Mae or Freddie Mac? A: Call your current lender or mortgage servicer. You can find the phone number on your monthly mortgage statement or coupon book. You can also contact Fannie Mae at 1-800-7FANNIE and Freddie Mac at 1-800-FREDDIE from 8 a.m. to 8 p.m. EST. Or, go to http://www.fanniemae.com/homeaffordable and http://www.freddiemac.com/avoidforeclosure and fill out the online request forms. Q: What borrowers qualify for the modification program? A: You don’t have to be behind on your mortgage payments to qualify. Delinquent borrowers and current borrowers who are at risk of imminent default are both eligible. The program applies to mortgages made on Jan. 1 or earlier. The mortgage payment including taxes, insurance and homeowners association dues must exceed 31 percent of the borrowers’ gross monthly income. The property must be the homeowner’s primary residence. It can’t be investor-owned, vacant or condemned. Home loans for single-family properties that are worth more than $759,750 don’t qualify. The program is voluntary, relying on a $75 billion subsidy to encourage mortgage companies to participate. Lenders must agree to reduce the loan payments to 38 percent of a borrower’s monthly income. After that, the government and lender split the cost of bringing the payment down to 31 percent. Eligible borrowers will have to provide their most recent tax return and two pay stubs, as well as an “affidavit of financial hardship” to qualify for the loan modification program. In the affidavit, applicants will have to cite the reasons behind their financial woes, such as job loss or a drop in income. The government will then take steps to verify the information. Borrowers are only allowed to have their loans modified once. The program runs through Dec. 31, 2012. Q: What if I’m in bankruptcy or in active litigation over my mortgage? A: That doesn’t necessarily keep you from qualifying for the modification program. And borrowers in active litigation can modify their home loans without waiving their legal rights. Q: What do I do to get help? A: For the modification program, call your lender or mortgage servicer to see if you’re eligible. For the refinance program, first find out if your mortgage is held by Fannie Mae or Freddie Mac. Then contact your lender, mortgage servicer or a mortgage broker for refinancing options. Q: How soon can I get help? A: Both the modification and refinancing programs start immediately. Q: What if I don’t qualify for either program – is there any other way to get help with a mortgage? A: Contact your lender or mortgage servicer regarding other modification programs or refinance options. Alternatively, contact a local housing counselor to negotiate with your lender or servicer, to help locate other local resources like rescue grants or loans, or to facilitate a short sale or deed-in-lieu of foreclosure if staying in the home isn’t possible. A short sale is where homeowners sell houses for less than the amount owed on them, and the lender then considers the debt paid off. A deed-in-lieu of foreclosure is where the borrower gives the property to the lender to satisfy a delinquent loan and to avoid foreclosure proceedings. Local housing counselors can be found at the U.S. Department of Housing and Urban Development’s Web site at http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm. Q: Do FHA, VA or USDA home loans qualify for modifications under the Obama Loan Modification Plan? A: Mortgages backed by the Federal Housing Administration, Veterans Administration or the U.S. Department of Agriculture are being modified under other programs. The Obama Administration and Congress are working on legislation that would allow modifications of these home loans consistent with the Making Home Affordable program.

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www.seanlarue.com Your KEY To Moving Home! Sean La Rue and Jason Baker help a caller JW talk through his loan modification and what he can do.