Mortgage & H4H Update

· Early projections indicate that only 20,000 troubled homeowners will apply for the “Hope for Homeowners” program, a considerable reduction from the previously estimated 400,000 homeowners who were expected to apply. The $300 billion program was launched Oct. 1 and is designed to help troubled homeowners rewrite a “risky” mortgage loan into a 30-year, fixed-rate loan with a lower interest rate. During the first two weeks of the program, the Federal Housing Administration, which oversees Hope for Homeowners, reported receiving only 42 applications. Some housing experts believe the low application rate is due to the program being voluntary for lenders and provisions requiring homeowners to agree to an equity share with the government.

To read the full story, please click here:
http://www.latimes.com/business/la-fi-hope4-2008nov04,0,5527840.story


· Less than half of homeowners with mortgage loans through IndyMac have responded to offers from the Federal Deposit Insurance Corporation (FDIC) to lower loan payments and interest rates. The FDIC, which is running IndyMac, mailed 35,000 letters offering homeowners an opportunity to rework the terms of their mortgages. The goal is to reduce the monthly payment on a loan, including taxes and insurance, to no more than 38 percent of the borrower’s pretax income. The FDIC is prepared to implement the following: reduce the interest rate to as low as 3 percent; extend a loan’s terms to 40 years; and waive interest on a portion of the mortgage balance.

To read the full story, please click here:
http://www.latimes.com/business/la-fi-indymac31-2008oct31,0,5613024.story


· JPMorgan Chase & Co. has reported that it is instituting a 90-day foreclosure freeze while it searches for ways to make payments easier for consumers. The program may enable up to 400,000 borrowers to reduce their interest rates or principal amounts. The bank also will open 24 mortgage counseling centers in areas with the highest delinquency rates. JPMorgan also is planning to hire 300 loan counselors to work with delinquent borrowers and employ approximately 150 additional staffers to review each mortgage prior to sending it through the foreclosure process. The program offer is extended to borrowers who have loans through Washington Mutual Inc., and clients of EMC, a mortgage unit of Bear Stearns Companies. Both companies were acquired by JPMorgan in recent buyouts and takeovers.

To read the full story, please click here:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aR3.7ix83s6s&refer=home


· Bank of America, which acquired Countrywide in July, said that nearly 400,000 troubled homeowners who have subprime mortgages and option adjustable-rate loans through Countrywide may be eligible for loan modifications. To be eligible for the Bank of America plan, homeowners must occupy the home as their primary residence; the mortgage must be seriously delinquent — or likely to become so; and the loan must have been serviced by Countrywide and originated prior to Dec. 31, 2007. Bank of America will help borrowers by restructuring first-year payments of principal, interest, taxes and insurance to no more than 34 percent of the borrower's income; halting foreclosure sales against borrowers who are likely to qualify for a loan modification; and waiving restructuring fees and prepayment penalties.

To read the full story, please click here:
http://www.usatoday.com/money/economy/housing/2008-10-06-countrywide-mortgages-settlement_N.htm