Mortgage Relief only for Some Borrowers

Dec 13th, 2007 @ 4:20 PM by MortgageMentor

If you are one of the mortgage holders who has been hoping to get relief from the new mortgage relief plan, you should know that these are voluntary guidelines. Lenders are not forced to cooperate – and only some borrowers will get help with their mortgages. The Mortgage Bankers Association says that foreclosures are at their highest level across the board, not just in subprime lending — although that is the area that the administration-backed initiative is aimed at.

Basically there are three options available to borrowers. The options are:
Refinance the loan into a new private mortage
move into an FHA secure loan (see the FHA website)
freeze the interest rate for 5 years

Freezing the Rate
The interest rate freeze depends on:

• when you got the loan – between 1/1/05 and 7/31/10
• when the interest ratet will reset – by July 31, 2010
• how much equity you have in the property
• credit scores

You’re only eligible for the rate freeze if you live in the house; that means investment property and vacation homes do not qualify.

Some people have estimated that, although the plan is being touted as helping 1.2 million people, it could actually help as few as 145,000. Borrowers who owe at least 97 percent of the home’s value– or even more than the house is worth — are eligible. Yet the people who have good credit, who have not missed any payments and who owe less on their home, are NOT eligible. In fact, you’re better off if you have missed payments because you are ELIGIBLE for the relief; people who make all their payments on time won’t qualify. However, the FHA program, FHASecure, will allow families who have shown strong credit but who are in default to refinance into a safer loan.

The program helping the subprime borrowers who qualify is being called the Hope Now Alliance. They have set up a 24-hour hotline at (888) 995-4673.By calling the hotline, borrowers can find out what options they have other than foreclosure.

It is a fact that half the people who go into foreclosure never talk to the lender first.If you are a homeowner in trouble on your mortgage, you owe it to yourself to speak with your lender and/or contact Hope Now.

3 Responses to “Mortgage Relief only for Some Borrowers”

1. sofia12 says:

   December 21, 2007 at 4:53 pm

   FYI, I tried calling the number above and they had NO idea what I was talking about — totally clueles
2. Chet the Vet says:

   December 24, 2007 at 4:47 pm

   thats good to know
3. fha guru says:

   January 19, 2008 at 4:05 pm

   Is the new stimulous plan going to work?