Who Qualifies for Mortgage Help and How to Get It?


Questions and answers about the Hope for Homeowners Act of 2008, passed by Congress last weekend and signed into law today, July 30. It is important to try to steer as many as 400,000 struggling homeowners away from foreclosure:

A: It will allow those who qualify to cancel their old mortgage loans and replace them with 30- fixed-rate loans for up to 90 percent of the home’s current value. The FHA will insure a total of $300 billion of the loans over a three-year period. What exactly will the legislation do?

Q: Who is eligible?

A: Eligible borrowers must have spent more than 31 percent of their monthly incomes on their mortgages as of March 1, 2008. The troubled loan must have originated within the time period of January 1, 2002 through December 31, 2007 and be the borrower’s primary residence. And the borrower’s income must be verified.

Q: When does the program start? Since lenders can pick and choose which loans to refinance, how can consumers determine if theirs will be selected?

A: It takes effect Oct. 1 and runs through September 2011, although the FHA isn’t likely to have it operating at full capacity until next year.

A: Check with the bank or financial company servicing your mortgage, but it may be weeks before they make decisions concerning the new guidelines and assess individual loans. Even then, keep expectations limited.

Servicers are going to be reluctant to take the government up on their offer,” predicted Mark Zandi, chief economist at Moody’s Economy.com. “The earliest they’ll start taking them up on it is early next year. And even then it’s likely to be modest.”

Q: Is there anything a homeowner can do to improve chances of benefiting from the program, such as crunching numbers to make a case for the bank? Q: But doesn’t this provide an incentive to NOT pay your mortgage, if you’re barely keeping ahead of bills and are underwater on your house, so you can qualify? Q: So what should I be doing now besides trying to keep up with payments

A: Public and political pressure may prompt them to participate. If not, and more people continue to lose their homes, Zandi says the next White House administration subject them to additional regulations or investigations if they remain unwilling to take on the risks.

Q: What happens if I’m able to sell my home after I refinance?

Q: If the banks and lenders refuse to write these loans, then what?

A: Not really. The best step is to keep up your payments as best you can.

A: No. If your situation deteriorates enough the bank may reject any possible new loan. “Turning yourself into a financial basket case is not going to work,” said Dan Seiver, a finance professor at San Diego State University. “If you turn into a complete deadbeat, the servicer is going to just foreclose and dump it.”

A: Talk to a local credit counselor and call the toll-free hot line of the Hope Now alliance an industry group trying to coordinate a response to the mortgage crisis.

A: If you sell during the next five years, you must agree to share 50 percent of any profits from the resale with the government. What’s more, homeowners can only retain equity gains based on a sliding scale. The homeowner would have zero equity from a sale in the first year, with the amount rising 10 percent in each succeeding year and capping at 50 percent from a sale in year five and t hereafter, the equity must be repaid because the maximum amount on the new loans will be capped at 90 percent of the current market value, which automatically gives the previously troubled homeowner 10 percent equity in the home.


  1. I have sued my bank under the basic allegation that they do not posses he original note, so far this has stopped the sale and therefore the bank cannot complete it.
    do you feel i have a good claim? vs the bank?
    will you help me to regain my property?

    • Banks can transfer their notes. In legal language, this is called transferability or liquidity and some time called negotiablity. These are big words. A note is a negotiable instrument just like your dollar bill and can be freely exchanged. Your note is like a promissory note which your original lenders (read the detailed terms of your mortgage papers) can freely transfer to another lender or servicer. The only thing they cannot change is the terms of the note. That would stay same regardless of any other “negotiability” of your loan. Also, please contact an attorney who is very familiar with the rules of RESPA and TILA in this regard.

  2. Suing may stop the foreclosure proceedings, if any. First of all, one has to read your original note, if the original lender can sell, transfer your lien. My impression is that bank generally can sell their note to anyone of their choice as long as the basic obligations are not changed between the parties. You have to find some predatory lending practices by the bank, or some RESPA or TILA violations. That is a very technical job. Once you prove that bank had done actual violations of the sale process you may rescind the contract. All this is very complex and techincal and I recommend seeking help from a qualified attorney.

  3. Few more questions about foreclosure. Please do not give the property back to the lender right aways. You still entitled to give them possession after getting the basic charges for moving out. Ask a minimum of $5,000 to $10,000 to move out. Just don’t hand over the keys to them. A foreclsoure is not akin to eviction. The bank still needs to legally evict you through a court order. Again, you need these expenses to find a comparable location. Needs help in this regard, or you have been served a legal notice of eviction, please contact us at (702) 270-9100 or send email at Malik11397@aol.com right away.

  4. I have an interest only loan coming due August of 2010 and then adjusts every 6 months. I owe $248,000 on the house and was told that comps in the area are $177,000. Is there anything that you can do so that I can get the principle reduced and get a fixed low interest rate for a 30 yr term. I have talked with US Foreclosure Prevention LLC and they said that they specialize in finding RESPA violations and if violations are found use this to get the principle reduced to comps and get a lower interest rate for 30 years. Called State of NV Department of Business and Industry Division of Mortgage Lending and they said that the company was not licensed and that US Forclosure Prevention can not quarantee that they can make this happen, they also wanted $5500 to do this which she said was a lot of money. Any advice would be appreciated Thank you

    • Most of the loans generated from 2001 and onward were interest only loans. Unfortunately, the federal guidelines does not ask for reduction of principal balance. Lately, there is some program which is starting this week and whose details are very sketchy and very strict criteria for qualification. If you get a lower payment by reduction of your interest to lower payments and that too on fixed, you should be lucky. Millions of people are struggling for that. I would strictly advise you to speak with licensed attorneys only. There are lots of scam. Even the licensed mortgage loan modification have done lots of wrongs and I see lots of their clients coming to me. If your home is foreclosed, what exactly they can do? Basically nothing. They are only paper forwarding machines, and good in that. $5500 is heck of fee for this kind of work. Everyone is claiming RESPA violations, but few has actually on their loan documents. It has to be serious violations for a law suit to stand the rigors of judicial scrutiny. Hundreds of people are filing lawsuit and judge are dismissing them as swifly.

  5. we were wrongfully evicted and we stayed on as long as we could. First the sheriff told us to leave. We let a friend park her car in our driveway. The car had to be off the property, so it rolled off the driveway onto the side street next to the house we lived in for 28 years. We lived in the car for the next three weeks. The sheriffs showed up twice. Once to tell us that we aren’t supposed to be living in the car, but we wont tell you to leave, but eventually you will have to leave. So that happened and my friends car got towed away. After losing another roof over our heads, we went right back in our home, the one we got wrongfully evicted from. We remained in ” our home” for nearly two months more. The new owner of our home told us that we were done wrong by the previous lender-owner so he “let” us stay. We stayed as long as we possibly could. We had to leave when workers began tearing the house down in preparation for remodeling our home so they could sell our home so they could make money on our home. They also had to have our beloved pets our dogs taken away from their home. They had to call the pound so the pound could take them away from their home so they could be away from the family that loved them. sharon r. mccafferty

    • First of all, how did you figure out that you were wrongfully evicted? There must be an unlawful detainer lawsuit served on you which you probably ignored it, and a default judgment entered against you. Without a default judgment, and order from the judge no marshall can serve on you. Once you are evicted, you need to take all your possession from the property otherwise this would be treated as trespass. Again, you cannot let any of your friend park their car on the property which is not owned by you. Sheriff is right as you cannot live in the car which is parked on someone’s property. I am sorry but I do not see any merits in your case.

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