Time is running out on the Hope For Homeowners program which is currently set to stop permitting endorsements after September 30, 2011.
During the sub-prime mortgage crisis, the Hope For Homeowners program was created to help stabilize the housing market. It was originally created to prevent qualified home owners from defaulting on their loans, and avert foreclosure. Those in danger of defaulting on FHA home loans were urged to call their lenders and request an evaluation for eligibility in the program.
According to the Hope For Homeowners Act of 2008, borrowers were eligible of the original loan originated before 2008, the loan default was not caused intentionally, and the borrower didn’t have multiple home loans.
This was not a simple refinancing plan similar to other loan forbearance or FHA loan modification programs; the program featured something called equity sharing where the borrower was required to share any equity built up in the property under the Hope For Homeowners loan with the government.
As the Hope For Homeowners program winds down, there are important milestone dates FHA borrowers and lenders trying to take part in the program before it ends must observe. One important date, the last day an FHA borrower may obtain a Hope For Homeowners case number, has already passed–that date was July 29. No new case numbers for the program are being issued.
For those who submitted their applications and got case numbers prior to the cut-off date, the final date for Hope For Homeowners loan endorsement is September 30th, 2011. According to the FHA official site, “Under the statutory requirements for the H4H program, eligible cases must be insured no later than the program termination date of September 30, 2011.”
Hope For Homeowners was never intended to be a permanent part of an FHA or conventional borrower’s options to avoid loan default or foreclosure. According to FHA mortgagee letter 11-20, ” The H4H program is a temporary program authorized under the Housing and Economic Recovery Act (HERA) of 2008, and amended by the Helping Families Save their Homes Act of 2009.”