Newly Launched HOPE Now 4 Homeowner (H4H) Loan Program Will Reduce Mortgage Balances for Millions

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Program unveiled on October 1, 2008 by FHA is just beginning to be understood, and it gives hope now to homeowners who owe more on their homes than appraisal value. Under the FHA H4H program, home owners can borrow 90% of the appraised value, and lower their mortgage interest rate with a new 30 year fixed rate. Home owners also receive a lower payment and mortgage relief. More at The existing mortgage lender would receive a guarantee from FHA, and potential home value appreciation if the home is sold in the next 1-5 years.

The Hope for Home Owners program (H4H) is now a powerful tool to stop foreclosures and correct over leveraged homes from slipping into default and foreclosure. Under this program, home owners who owe more on their homes than the appraisal value can receive a new fixed rate loan with a mandated 10% equity. This means the home owner will regain at least 10% of the appraisal value in new net worth, reduce their mortgage balance and mortgage payments.

Substantial mortgage relief will allow home owners to regain the sense of home equity ownership at payments they can afford. Borrowers who are current or in default on their mortgage may qualify.

In order to qualify for the program, the existing mortgage must have been received before January 2008, and the existing lender must agree to what is basically a short sale to 90% of the current appraisal value.

For example, if you paid $200,000 for a home in 2007 that you put $20,000 down on, and owe $180,000 on a sub prime mortgage at 9% with monthly payments of $1154; and today your home appraises for $175,000. Under the H4H program you can receive a new 30 year fixed mortgage for 6.5%, for 90% of $175,000 or $157,500 new FHA loan, with just $509 per month payments.

That's a $22,500 reduction in your mortgage debt, and a $645 a month reduction in your payments. That's mortgage relief!

To get this level of mortgage relief you must agree to share the equity and appreciation in the home's future value with the Government. The amount of equity shared scales down for the first 5 years from a 100% to 50% split.

The H4H program is new and backed by a $300 Billion funding by the US Government through HUD and FHA. Lenders will benefit by stabilizing home values and reducing the number of defaulting loans on their books. Through the H4H program, participating lenders may also benefit from future appreciation in homes.

Reverse Mortgages:

For home owners over 62 years old the Reverse Mortgage is another powerful tool that is being utilized to keep people in their homes. Reverse mortgages are not new programs, but they allow a senior to stay in their home, pay off existing mortgage obligations and never make a monthly mortgage payment until they sell or move from the home. The reverse mortgage simply accrues the interest to the principal balance until a future sale pays off the loan. There are numerous reverse mortgage options for senior home owners, but all have the same intention of allowing seniors to retain their homes longer and with less impact on their monthly cash flow.

Americor Mortgage, founded in 1986, has launched a new website to better explain the Hope 4 Home owners program now. This website aims to educate home owners in need and put them in touch with the right departments within their lender or lenders who can help them gain mortgage relief.


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J.H. Heck
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