Low Rate Mortgages - Mobile Alabama, Low Rate Home Loans, Mobile Alabama

The HOPE for Homeowners program was created by Congress to help those at risk of default and foreclosure refinance into more affordable, sustainable loans.

The program is effective from October 1, 2008 to September 30, 2011.

How the Program Works

There are four ways that a distressed homeowner could pursue participation in the HOPE for Homeowners program. Homeowners may contact their existing lender and/or a new lender to discuss how to qualify and their eligibility for this program.

Originating lenders who are looking for ways to refinance potential customers out from under their high-cost loans and/or who are willing to work with servicers to assist distressed homeowners.

Counselors who are working with troubled homeowners and their lenders to reach a mutually agreeable solution for avoiding foreclosure.

It is envisioned that the primary way homeowners will initially participate in this program is through the
servicing lender on their existing mortgage. Servicers that do not have an underwriting component to their mortgage operations will partner with an FHA-approved lender that does.

Step 1: Cost-Benefit Analysis

Lender considerations:

Given their fiduciary responsibilities and financial obligations, lenders will assess their portfolio and
perform a cost-benefit analysis to determine the feasibility of offering this program to struggling
homeowners.

Affordability versus value: lenders will take a loss on the difference between the existing obligations and
the new loan, which is set at 90 percent of current appraised value. The lender may choose to provide
homeowners with an affordable monthly mortgage payment through a loan modification rather than
accepting the losses associated with declining property values.

Borrower eligibility: Lenders that determine the program is a feasible and effective option for
mitigating losses will assess the homeowner's eligibility for the program:The existing mortgage was originated on or before January 1, 2008;
Existing mortgage payment(s) as of March 1, 2008 exceeds 31 percent of the borrowers gross monthly
income;The homeowner did not intentionally default, does not have an ownership interest in other residential real estate and has not been convicted of fraud in the last 10 years under Federal and state law; andThe homeowner did not provide materially false information (e.g., lied about income) to obtain the mortgage that is being refinanced into the Hope mortgage.

Consumer considerations:

The lender will disclose to the homeowner the benefits of the program: Home retention,
New affordable mortgage based on current appraised value, 10 percent equity The lender will also disclose to the homeowner the costs of the program:

3 percent upfront mortgage insurance premium and a 1.5 percent annual premium,Equity and appreciation sharing with the Federal government, and Prohibition against new junior liens against the
property unless they are directly related to property maintenance.

Step 2: Negotiations Between Borrowers and Lien
Holders

If the lender refinancing the loan does not hold the senior mortgage lien, it will need to secure an
agreement from the existing lien holder to waive all prepayment penalties and default fees on the existing loan and accept the loan proceeds from the loan as payment in full. The loan amount (including the 3 percent UFMIP) for the new Hope loan cannot exceed 90 percent of the current appraised value of the property.

The lender will engage existing subordinate mortgage lien holders to extinguish all subordinate liens on the subject property. To entice subordinate lien holders to participate in the negotiation process and release their liens, FHA has the authority to share its future appreciation entitlement with them.

Step 3: Originating an Hope Mortgage

The lender will qualify the homeowner for the new mortgage using the guidelines established under
the terms of the program's unique statutory requirements, ensuring the homeowner has the
capacity to make the new payment on the Hope mortgage in a timely manner.

During underwriting of the loan, the lender will calculate the future appreciation interest amount for
each subordinate lien holder in accordance with instructions provided by FHA.

At settlement, subordinate lien holders will receive a certificate that evidences their interest as an obligation backed by HUD, with payment conditional on the value of HUD's appreciation share.

Following funding of the loan the lender will record - in addition to the typical security instrument and note
for the first mortgage - a shared equity note and mortgage (SEM) and a shared appreciation note and
mortgage (SAM). These mortgages will be serviced by FHA.

The lender will also submit the new mortgage for insurance to FHA, certifying that it has been
originated, underwritten and closed in accordance with the Hope program guidelines.

Step 4: Fulfilling Hope Mortgage Obligations

Upon sale of the property, the homeowner will use their sale proceeds to pay off the Hope mortgage as
well as the shared equity and shared appreciation mortgages.

FHA will provide instructions to the settlement agents regarding subordinate lien holders who are entitled to a portion of any appreciation. The lien holder that previously held the highest priority will receive
payment up to the full dollar amount of its interest, not to exceed the amount of available appreciation,
and so on, until all prior lien holders are satisfied or the amount of available appreciation is exhausted. All remaining appreciation is remitted to FHA.

In instances where the homeowner failed to make the first payment on their new Hope mortgage, the H4H statute prevents FHA from paying claim benefits to anyone holding the mortgage.

The "HOPE for Homeowners Act of 2008" creates a new, temporary, voluntary program within FHA to back FHA-insured mortgages to distressed borrowers. The new mortgages offered by FHA-approved lenders will refinance distressed loans at a significant discount for owner-occupants at risk of losing their homes to foreclosure. In exchange, homeowners will share future appreciation with FHA.

The program is built on five principles:

1. Long-term affordability. The program is built on the idea, expressed by Federal Reserve Chairman Bernanke, that creating new equity for troubled homeowners is likely to be a more effective way to avoid foreclosures. New loans will be based on a family's ability to repay the loan, ensuring affordability and sustainable homeownership.

2. No investor or lender bailout. Investors and/or lenders will have to take significant losses in order to benefit from the proceeds of the loans refinanced with government insurance. However, these losses would be less than the losses associated with foreclosure.

3. No windfall for borrowers. Borrowers will share their new equity and future appreciation equally with FHA. Borrowers will pay for the FHA insurance.

4. Voluntary participation. This will be a voluntary program. No lenders, servicers, or investors will be compelled to participate.

5. Restore confidence, liquidity, and transparency. Credit markets are fearful and frozen in part because banks and other financial institutions do not know what their subprime mortgages and related securities are worth. The uncertainty is forcing lenders to hoard capital and stop the lending necessary for economic growth. This program will help restore confidence and get markets flowing again.

Program Oversight


Eligible Borrowers. Only owner-occupants who are unable to afford their mortgage payments are eligible for the program. No investors or investor properties will qualify. Homeowners must certify, under penalty of law, that they have not intentionally defaulted on their loan to qualify for the program and must have a mortgage debt to income ratio greater than 31 percent as of March 1, 2008. Lenders must document and verify borrowers' income with the IRS.

New Loan Amount. The size of the new FHA-insured loan will be lesser of the amount the borrower can afford to repay, as determined by the current affordability requirements of FHA; or, 90% of the current value of the home. Loans must be 30-year, fixed rate loans.

Equity & Appreciation Sharing. In order to avoid a windfall to the borrower created by the new 90% loan-to-value FHA-insured mortgage, the borrower must share the newly-created equity and future appreciation equally with FHA. This obligation will continue until the borrower sells the home or refinances the FHA-insured mortgage. Moreover, the homeowner's access to the newly created equity will be phased-in over
5 years.

Eligible Mortgages. In order to protect against adverse selection, the program prohibits the Secretary from paying an insurance claim whenever the representations and warranties required to be made by lenders are violated, or in cases in which a borrower has an early payment default and misses the first payment. The Act provides the Board the authority to establish other protections against adverse selection, such as requiring "seasoning" for certain higher risk loans before they can be insured under the program. Appraisers of property insured by FHA must be certified by the state where the property is located, or by a nationally recognized professional appraisal organization, and have "demonstrated verifiable education" in FHA appraisal requirements.

Existing Subordinate Liens. Before participating in this program, all subordinate liens must be extinguished. This will have to be done through negotiation with the first lien holder.

Qualified Safe Harbor. The legislation provides servicers with an incentive to participate in the program by offering a safe harbor against legal liability.Program Size. The program is authorized to insure up to $300 billion in mortgages and is expected to serve approximately 400,000 homeowners.

Program Sunset. The program will begin October 1, 2008 and sunset on September 30, 2011. CBO say the program will net nearly $250 million for taxpayers. The program is paid for by using part of the Affordable Housing Trust Fund; the GSE bill provides a further $2 billion cushion for the government by establishing a reserve fund at Treasury over ten years. If the program costs less than projected, the unused funds are returned to the Affordable Housing Trust Fund. If the program more than pays for itself (as was the case during the Roosevelt Administration), any excess savings are dedicated to reducing the national debt.

Marlon G. Cook, a regional manager in the Federal Deposit Insurance Corp. in Atlanta, told those at Tuesday's Coastal Economy Outlook conference that Alabama's financial and real-estate markets are doing better than most of the country.

Cook predicted mortgage credit would "remain under tremendous pressure until the end of the year and into 2009." But, he added, Alabama is doing "relatively well" compared to its neighbors in Florida and Georgia, and when compared to the nation.

"We find good news with ThyssenKrupp, which will bring in about 3,000 jobs," he said. The German steelmaker is building a $3.7 billion steel plant in north Mobile County that is set to open in 2010.

Consumer spending is better in Alabama than in the rest of the Southeast, according to Cook.

Mortgage credit conditions are not as tight in Alabama as in many other states, he said. For example, there were 56,000 subprime mortgages as of June 30, with 1,800 of them the two- and three-year hybrid loans that caused much of the mortgage and foreclosure problem. "These numbers are so low, and that's good for the state,"

He said only 11 percent of the subprime loans in state were issued in Mobile the 2nd largest city.

What I have noticed, there is still a lot of lenders wanting to lend money in our State,

Take a look at rates this morning, with good credit as low as ........

5.625 for 30 year Conventional loans, 5.75 for FHA 30 year loans

All they ( the lenders ) are asking is that the buyers have verifiable income, prove responsible debt management, have reasonable debt to their income and have a small down payment.

I am excited about Mobile's opportunity to grow and quality of life for Mobilians.

1. Get the right mindset. Once you list your home, detach yourself.

2. Start at the curb. Look at what people see when they pull up.

3. Paint -- it's money in a can.

4. Focus on the entry.

5. Catch up on maintenance. Get around to the repairs you should have been doing all along.

6. Look for alternatives to expensive or messy upgrades.

7. Consider new appliances.

8. Add some house bling. Make anything metal in your home look new and shiny.

9. Start packing. "The average home would show much better if it had 50% less stuff,"

10. Remove the "you" factor. Sorry but home buyers don't care about your trophies, your hobbies, your taste in art or your photos.

11. Clean house.

12. Banish smells.

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