Look at the participating lender list....that's tragic....no b of a, no wells, no chase, no nada, nobody, no how...what a sham........there's not one major lender on the list of approved lenders....big surprise it won't work......bad plan, bad implementation, just plain ol' bad!!!
I've determined this program will not work and here's why:
1. We recently attempted to implement the HOPE program but the guidelines implemented to receive a HOPE loan pretty much guarantee, no mortgage company will get involved other than current mortgage servicers simply because there is no way to make any money on this, excuse me $20 or 1% of the loan amount whichever is LESS.
2. It requires the homeowner to contact the current mortgage servicer to even attempt getting a HOPE loan, and we all know these are the same people that have confronted the homeowner every other day to collect on the mortgage payments.
3. Even with shared appreciation getting a 2nd lien holder to write off their mortgage and get the 1st mortgage holder to reduce the balance 90% of the current appraised value doesn't make any sense. I'm assuming the reasoning is because it's cheaper than foreclosing.
4. It requires borrowers to meet stringent income guidelines which most will not be able to meet.
If you really want the HOPE loan to float, make it no loan at all.....
1. Reduce the interest rate to current fixed rates.
2. Modify the loan to move the delinquent payments to the rear of the mortgage
3. Don't write down the balance simply because they're in the arrears, and the home value's not there right now.
4. Reduce the MI Premium to FHA level irregardless of credit standing
5. Modify all 2yr fixed ARM loans to standard fixed rate loans.
6. Prohibit current mortgage servicers from reporting to the credit bureaus any negative rating until the housing market recovers.
7. Make it financially vialable for outside mortgage companies to originate these things
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