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The Hope Now Alliance is a cooperative effort between the US government, counselors, investors, and lenders to help homeowners who may not be able to pay their mortgages.
The Hope Now Alliance is a cooperative effort between the US government, counselors, investors, and lenders to help homeowners who may not be able to pay their mortgages.
The program promotes a national 24 hour toll-free telephone number (1-888-995-HOPE (4673) through which the Homeownership Preservation Foundation (a member) offers free counseling to homeowners concerned about foreclosure. Counselor review loan type, the number of months of missed payments, etc, and then make the best possible recommendation(s) on the next steps to avoid foreclosure.
Call Hotline – 1-888-995-HOPE (4673)
Implemented on December 15, 2008, the Federal Government Loan Modification Program (HopeNow Alliance) is designed to reduce preventable foreclosures with a simplified, streamlined loan modification program to put struggling homeowners into mortgages they can afford. The intended goal is to have a uniform process for loan modifications that the majority of lenders and servicers will use. Participants include: Fannie Mae, Freddie Mac, Federal Home Loan Banks, Hope Now participants, Department of Treasury, Federal Housing Administration and the Federal Housing Finance Agency, and Wells Fargo Bank.
Hope Now describes the assistance that it provides to homeowners as loan workouts, a form of loss mitigation. These workouts can either result in establishing a modified repayment plan with the homeowner to bring them up to date, or a loan modification where the terms of the mortgage are modified in order to make the loan serviceable for the homeowner
A distressed homeowner could pursue participation in the Hope Now Alliance by doing the following:
- Homeowners should first assemble ALL their mortgage documents and prepare themselves for speaking to a counselor.
- Homeowners should then call the HopeNow Hotline: 1-888-995-HOPE (4673)
- HopeNow counselors working with troubled homeowners may determine that the best solution for avoiding foreclosure is to refinance the homeowner into a HOPE for Homeowners loan, or they may suggest an alternative option -- it depends on your individual situation.
- It is also suggested homeowners attend a Hope Now sponsored workshop event in their area. Hope Now in some areas is sponsorsing six-hour long foreclouse workshops at local community colleges nationwide. These events are free and often include in attendance mortgage servicers and loss mitigators. See below for a link to upcoming events.
It is envisioned that the primary way homeowners will initially participate in this program is through the servicing lender on their existing mortgage. Servicers that do not have an underwriting component to their mortgage operations will partner with an FHA-approved lender that does.
The eligibility requirements are as follows:
- Borrower must have missed three or more payments
- Must be primary residence and owner occupied
- Borrower must NOT have filed for Bankruptcy
- Modifications would be designed to achieve sustainable payments at a 38% debt-to-income (DTI) ratio of principal, interest, taxes and insurance.
If I can’t pay my mortgage, why should I call my mortgage lender/servicer?
Your mortgage lender can help you identify the options available to you, should you have trouble paying your mortgage.
When should I call my lender?
You should contact your lender as soon as you know you will have difficulty meeting your mortgage payments. You do not have to wait until your interest rate re-sets, nor do you have to wait until you are already behind in your payments. In fact, the sooner you call, the more options will be available to you. No matter what your situation is, CALL TODAY.
What if I don’t want to call my lender?
Call the Hope Now Hotline – 1-888-995-HOPE (4673). This hotline is staffed by HUD-approved credit counselors who can guide you through possible options.
What is a loan workout?
Either a loan modification or a repayment plan.
What is a loan modification?
A modification occurs any time any term of the original loan contract is permanently altered. This can involved a reduction in the interest rate, forgiveness of a portion of principal or extension of the maturity date of the loan.
What is a repayment plan?
A plan that allows the borrower to become current and catch up on missed payments that are appropriate to the borrower’s circumstances.
Update (1/23/2009): The Hope Now program, includes 70 percent of the nation's major lenders, has modified approximately 2.2 mortgages since its launch in 2008 and is now helping about 200,000 borrowers a month -- including those who have redefaulted.
Since first being mentioned in December 2007, the Homeowner's HOPE Hotline received more than 140,000 calls in 2007 (including over 45,000 in the first three days), and an average of 3,200 calls per day in January 2008. The Hope Now programs are voluntary and privately funded. Critics say they don't go far enough to stem the housing crisis, which has mushroomed into a broader wave of economic distress.
It has been noted that the majority of assistance provided by the group has been to establish repayment plans, rather than actually modifying the terms of the mortgage
A significant problem is due to the fact that lenders are not obligated to participate. Lender agreement to loan modification terms is entirely voluntary in this program. For the program to work as intended, lenders must be willing to accept buyouts of their loans that will provide the lender with 90% or less of the current appraised value of the home. This simply has not been happening. The tide may be turning as lenders are being overwhelmed on many fronts.
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