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Obama's New and Improved "HOPE for Homeowners" Bill

  • May 22nd 2009

by Mark Wellborn

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On Wednesday, President Obama signed into law a bill that aims to remedy many of the problems of the original HOPE for Homeowners bill which went into effect on October 1st.

The main goal of the original bill was to help struggling homeowners by having banks reduce mortgage balances to 90 percent of a home’s market value. The new loan would be refinanced into a mortgage insured by the FHA. Because the bill was essentially a bad deal for many lenders because it cut their profits, most didn’t offer the program.

In an effort to improve upon the first version, the new HOPE bill only requires banks to reduce balances to 93 percent of the property’s market values and also pays banks $1,000 for every HOPE-refinanced loan.

The new bill also allows the Department of Housing and Urban Development to share the profits that come from future home appreciation with investors. The original version of the bill gave the agency the right to share just 50 percent of potential profits with homeowners.

There are many more provisions in the new HOPE for Homeowners bill, and if you are interested in learning more click here.

This article originally published at https://dc.urbanturf.com/articles/blog/obamas_new_and_improved_hope_for_homeowners_bill/947.

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