Congressman Paul Hodes Announces HOPE for Homeowners

For Immediate Release

October 2, 2008

Contact:        Mark Bergman

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  202-225-5206

Congressman Paul Hodes Announces HOPE for Homeowners

Washington, DC--- Congressman Paul Hodes announced today that additional protections are now available to homeowners. Congressman Paul Hodes co-sponsored the HOPE for Homeowners program that passed Congress last summer to provide additional assistance for the mortgage and foreclosure crisis, and the program went into effect yesterday.

The HOPE for Homeowners program was authorized by the Economic and Housing Recovery Act of 2008 to help homeowners transition to more affordable mortgage plans. Since the President signed this vital legislation into law on July 30, 2008, the HOPE for Homeowners Board of Directors has worked diligently to develop and implement the program as directed by Congress.

“Congress worked on a bipartisan basis to get this program passed to helped distressed homeowners and stem the foreclosure crisis,” Congressman Paul Hodes said. “Our current economic crisis was created by bad loans and foreclosures. This program seeks to alleviate the underlying problem creating the credit crunch. It is good program and I encourage New Hampshire families struggling to pay their mortgage to take advantage of it by refinancing their loan.”

The program went into effect October 1 and ends September 30, 2011. The program is available only to owner occupants and will offer 30-year fixed rate mortgages so the borrower's last payment will be the same as the first payment. In many cases, to avoid what would be an even costlier foreclosure, banks will have to write down the existing mortgage to 90 percent of the new appraised value of the home.

Homeowners can contact their lender to determine eligibility, but may be eligible if, among other factors:

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  • The home is their primary residence, and they have no ownership interest in any other residential property, such as second homes.
  • Their existing mortgage was originated on or before January 1, 2008, and they have made at least six payments.
  • They are not able to pay their existing mortgage without help.
  • As of March 2008, their total monthly mortgage payments due were more than 31 percent of their gross monthly income.
  • They certify they have not been convicted of fraud in the past 10 years, intentionally defaulted on debts, and did not knowingly or willingly provide material false information to obtain their existing mortgage(s).

HOPE for Homeowners also includes the following provisions:

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  • The loan amount may not exceed a maximum of $550,440.
  • The new mortgage will be no more than 90 percent of the new appraised value including any financed Upfront Mortgage Insurance Premium.
  • The Upfront Mortgage Insurance Premium is 3 percent and the Annual Mortgage Insurance Premium is 1.5 percent.
  • The holders of existing mortgage liens must waive all prepayment penalties and late payment fees.