Loan Modification vs. FHA – Hope for Homeowners Program Comparative Analysis!
track data, a BPO (broker price opinion) or a print out of valuation fromtitle company market sales data.9. If you are in foreclosure and costs have been incurred from posting yourforeclosure sales data, attorney fees, title costs or other costs; you couldbe liable for those costs, if our current lender requires it (as a requirementto the loan modification).10. Loss mitigation departments may choose to approve you for a new loanwhich is (another adjustable or tiered –fixed loan). Be careful. Do yourhomework or “talk-it-over” with your representation.
FHA- Hope for Homeowners Program:
1. The federal housing administration (FHA) has required that allhomeowners who become approved for this program accept a 30 yearfixed rate program. No other loan types will be accepted. You can onlyqualify for this program.2. FHA will loan up to 90% of the current value of your property. This meansthat if you purchased your property for a higher purchase price andcurrently have a loan amount higher than what the value of the property ispresently, you can become approved to do a loan amount at 90% of whatyour current house is worth.3. If you have more than a 1
trust deed lien (subordinate liens) on yourproperty and your property value has severely, diminished; your currentlenders may take the loss when you get approved under the “Hope forHomeowners Program”. Usually, the subordinate lenders loose, unlessthey purchase the primary lien. Most do not purchase the 1
trust deedlien. So, the subordinate lender takes a loose on their investment.4. FHA’s goal is to keep as many homeowners in their homes. Theyunderstand that it would be better to do a loan for a homeowner ratherthan have that property go into foreclosure, be place into the retail realestate marketplace, causing a further degrading of the housing market.5. The FHA underwriting guidelines are currently more liberal than any otherloan guidelines in the current market. FHA is more forgiving in theirapproach to mortgage lending.6. The FHA underwriting guidelines have not been disclosed. As October,1
, 2008 approaches, lenders, processors and underwriters will have amore clear idea as to what is required to get a loan approval.7. Homeowners will (probably) be required to pay for a new FHA appraisal,as a condition for loan approval and closing. Underwriting guidelines willdetermine if this is true. The average costs for an FHA appraisal isranges, $300 - $450.8. Income to debt ratios will be determined and posted in the underwritingguidelines. Consult your loan modification specialist or loan officer.9. The loan servicing companies that service, sub-prime loans will (probably)be more inclined to accept a loan modification, since they will want totransfer the lien to FHA, rather than keep it on their books. They have
Part of the Foreclosure Prevention Act of 2008