HOPE for Homeowners, nicknamed H4H, became law this summer to help keep homeowners from defaulting on their mortgages and going into foreclosure. Lenders who voluntarily allow borrowers to refinance under H4H are required to reduce the size of the mortgage to a maximum of 90 percent of the home’s current appraised value. Additionally, they are only allowed to put people in 30-year, fixed-rate loans.
The Federal Housing Administration will insure up to $300 billion of these new loans. As many as 400,000 homeowners could avoid foreclosure through H4H over the next three years.
This program provides a last hope for homeowners by bringing in the federal government as their investment partner for as long as they own their homes.
I know people are desperate to keep their homes, but they need to understand that H4H is an expensive rescue program. There is a great benefit upfront — you get to keep your home.