This past week the Obama administration signed into law changes to the current Help for Homeowners Program (H4H) in order to actually help more homeowners. The H4H program meant well but was not in fact assisting anyone (there was only ONE documented case of assistance in the months since it’s inception, with the preliminary targeted goal of assisting 400,000 families).
The new law, Helping Families Save Their Homes Act of 2009, streamlines how HUD will support thousands of homeless support programs across America. The main crux of this new program is to provide MORE incentives to both homeowners and lenders to rework loans and save homes from foreclosure‚helping homeowners get into more affordable fixed rate loans insured by the FHA. This will be accomplished by easing the eligibility requirements , reducing the cost of the program and giving the FHA power to offer more substantial loan modifications.
FHA will have more power to create programs and use enforcement tools to police lenders who do not use fair and realistic marketing tactics, thus keeping ‚Äúbad‚Äù lenders out of the FHA programs.
The new law will also allow HUD to help more local homeless housing and service programs, and also will give communities resources to use federal funds in positive ways to assist in needed areas and programs.
Finally, the changes aim at helping those who cannot get a loan modification avoid foreclosure by using the U.S Treasury Department’sdeed in lieu of foreclosure option (also called ‚Äúcash for keys‚Äù). This is where a homeowner turns over their keys and title to the home to the lender and the lender forgives the debt, in addition to providing a small cash incentive to the homeowner (usually around $1,000). Deeds in lieu have been difficult to obtain but the new program seeks to change that for those who do not qualify for other options.
For detailed information on the new program please visit http://www.whitehouse.gov/the_press_office/Reforms-for-American-Homeowners-and-Consumers-President-Obama-Signs-the-Helping-Families-Save-their-Homes-Act-and-the-Fraud-Enforcement-and-Recovery-Act/.