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I have previously expressed my view that the “Hope For Homeowners” program is really more of a “Hope For Politicians” program designed to make the citizens believe that the politicians really care about them. According to articles I have seen quoting Fox News (although I haven’t found the source quote yet), only 79 borrowers have been accepted into the program in the month since it officially began. Although, to be fair, secondary mortgage market issues can create quite a gap between the legal start date and the actual start date of such a mortgage program.
FHA training for loan officers is more important than it has ever been. Times are tough in the mortgage business. Loan officers are dropping out like flies. Heck, even lenders are dropping like flies! The loan officers disappearing the quickest are those who aren’t experts in originating FHA loans.
The seller assisted non-profit down payment assistance programs are officially gone for FHA loans as of October 1st 2008. These programs were easy to use and could be funded quickly and thus became extremely popular.
But they aren’t the only game in town.
There are literally thousands of federal, state, county, local and charity based grant programs available all over the country. During the last few real estate boom years, sellers had no patience with waiting while potential buyers jumped through all the hoops necessary to qualify for these programs, but times are different now. Those sellers who once had no patience have now had their home for sale by owner, listed and expired with 3 different real estate agents and on the market for over a year. They will jump at any buyer they can get and do whatever they can to help sell that buyer their home. They will now wait 45 days for a buyer to get qualified for down payment grants.
From HUD: The Housing and Economic Recovery Act of 2008 amends the National Housing Act to authorize a new temporary FHA mortgage insurance program called the HOPE for Homeowners (H4H) Program. Under this Program, certain borrowers facing difficulty in paying their mortgages will be eligible to refinance into affordable FHA-insured mortgages. The H4H Program is effective for endorsements on or after October 1, 2008 through September 30, 2011.
Although there is a chance that legislation will bring seller assisted down payment gift programs back before the end of the year, the non profit DPA programs are officially dead as of October 1, 2008.
Mortgage applications have dropped precipitously over the last few weeks for other reasons, so it will be interesting to watch how the ban will affect home sales if it lasts very long. Although we do need to let the air out of this real estate/credit bubble, watching people hurt financially due to all this uncertainty in the mortgage market is painful for everyone.
