Hope for Homeowners for Helping Tackle Foreclosures Tottering
December 3rd, 2008
Hope for Homeowners appears to be tottering. The plan Hope for Homeowners was launched on 1st October. It was aimed at helping 400,000 homeowners to avoid foreclosures over the coming three years. In October, less than 100 homeowners applied. According to projections made by Federal Housing Administration, only 13,300 will be benefited by the programme in the first year. Only 1,200 impending foreclosure victims out of 23,000 would be eligible to apply to the programme, according to an FHA official.
Under the programme, borrowers who are lagging in their payments will be allowed to refinance. The new loans will be more affordable and will be insured by FHA. The loan balance, and if required, the interest rate, will be reduced so that monthly payments are cut by 3- percent. When the house is sold, if there is any increase of value then half the value of the increase will go to the government. However, mortgage investors, lenders as well as borrowers are pessimistic about the plan and have been reluctant to join the bandwagon. Some homeowners are waiting for other options, such as a proposal mooted by Federal Deposit Insurance Corp.
Going by the initial reaction, Hope for Homeowners appears to be only one among a series of efforts by government and industry to tackle the foreclosure crisis. The disappointment is reflected in the words of the President of the National Community Reinvestment Coalition, John Taylor who said, “None of them have worked very well, and we’re all pretty disappointed”. The experience with hope for Homeowners can serve as a lesson for the Treasury Department and White House as further plans for checking foreclosures are discussed.
Hope for Homeowners entails that lenders of loans leading to foreclosures and those who invested in mortgage securities will suffer a big loss on each loan that is refinanced through this plan. If a borrower wants to join the programme, the owner of the current loan must agree to the replacement loan that will not be more than 90 percent of the home’s value. Due to a sharp fall in home prices, many homebuyers have mortgages, which are of much higher values than what their home is now worth. Hence lenders will suffer a loss under the programme.
Homeowners registering for the programme have to pay an upfront insurance premium, which they borrow as part of the new loan. Hence the refinanced loan becomes 87 percent of the value of the home.
- Ohio Is Also Scrambling to Get On to the Foreclosure Rescue Lifeboat
- The foreclosure crisis has led to the Museum of American Finance face an awkward situation
- Non-profit Organizations Spreading Across America to Help Foreclosure Victims
- Problems and Solutions for Underwater Foreclosure Victims
- North Carolina Foreclosure Victims Hungry for Details of Obama Rescue Plan
- More Help Is Coming for Foreclosure Victims from the Treasury
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January 1st, 2009 at 4:57 am
I’m a foreclosure victim due to a mistake by Americas Servicing Company owned by Wells Fargo Home Mortgage.
I’ve posts all over the internet.
I’m 46, disabled, now homeless after 18 years.
I live with my Mom, thank God for her. Losing my battle with Wells Fargo Bank after a 24 month fight filled with broken promises, resulting in a loss of almost $100,000 in equity (I only owed $61,000 on my mortgage) leaves me with a sadness I just can’t describe. I’m very alone just now.
Others have lost so much more, and had children, families. I have absolutely no right to complain, but my anger and hurt fuels me to keep posting information that will prayerfully help others facing scary circumstances.
I thank God for sticking around and making me realize, although I fight it, the most important lessons of life become most real to us, and are made a part of us quick and true when we lose something great. Something great to us.
I understand to my core the pain so many precious lives are suffering with hour by hour, please don’t forget to help those people who have already lost their homes AND those who are hanging on to theirs for dear life.
Thanks for listening.
Kelly L. Hansen
ctsmyhon@yahoo.com
DeSoto, Kansas
February 6th, 2009 at 9:27 pm
I so understand how you are feeling Kelly. After suffering from mental illness all my life I was finally stable enough to buy a home (along with my husband) and keep the payments up to date for 17 years. I was so proud of myself and my husband.
Then everything blew up in my face…now my house, that I was so proud of, is in foreclosure and I am effectively homeless. I lost my job because I am now physically disabled, and my loving husband of 22 years decided to marry another woman.
But you are right there are many, many more people in worse straights than you or I and I applaud you for your ability to see beyond your situation. It takes a while to get beyond the hurt but that, reaching out, really is the begining of healing. Not the end, mind you, but the true begining…it does get better than this, I promise you!
Nora