Hope for Homeowners is finally released.

What is the Hope for Homeowners program?
For those of you who can remember, the Hope for Homeowners also known as H4H was slated to go into effect October 1, 2008. The program was supposed to refinance those who were behind or current with their mortgage payments but owed more than their homes were worth, i.e. underwater.

What Happened to the Hope for Homeowners?
The program proved to be totally unworkable: fees were too high for the borrowers, lenders, specifically second mortgage holders, did not want to lose all their investment by writing it off, some borrowers did not want to share future appreciation with the government, etc.... Finally, there was no secondary market outlet for the new mortgages.

The new Hope for Homeowners.
The revisions announced October 20, 2009 address the major issues that doomed the initial implementation, and they are:
1. Secondary Market: new H4H mortgages can be securitized in Ginnie Mae MBS (Mortgage Backed Securities). This assures the lenders that they will be able to sell these loans after closing.
2. Elimination of the Share Appreciation feature: the owner will no longer have to share any future home value appreciation with the government. In its initial form, the government was entitled to 50% of any such gains.
3. Fees Reduction: the new fee (mortgage Insurance Premium) paid to FHA drops from 3% to 2%, and the monthly mortgage insurance premium is now 3/4% instead of 1.5%.
4. Paperwork reduction: income calculation no longer gas to be set at March 2008, tax returns, second and third mortgages, lender and underwriter certification are no longer needed.
5. Loan-to-value and debt-to-income ratios are reviewed to better suit the borrower's affordability parameters.

In summary, the revamped Hope for Homeowners program presents significant improvements over the first roll out. It is effective for endorsement on or after January 1, 2010.
Those willing to apply for this program can do so online at: www.p2funding.com or call John Palla at 773-451-5547
The full text of the revision is available at: www.hud.gov/offices/adm/hudclips/letters/mortgagee/