FHA Book

HOPE NOW Update

An article on Inman News details new guidelines for HOPE NOW, the program for helping homeowners facing foreclosure. Two such guidelines set deadlines for how long servicers have to inform borrowers of their options:

The new HOPE NOW guidelines state that loan servicers should inform homeowners within 45 days whether their application for a workout — such as a repayment plan, loan modification or short sale — has been accepted or denied.

Servicers also agreed to re-subordinate second-lien loans if their position will not be worsened by a refinance or workout — potentially removing a major obstacle to preventing foreclosures in cases where borrowers have “piggyback” second loans. HOPE NOW servicers will also attempt to contact homeowners with subprime adjustable-rate mortgages (ARM) and other homeowners with ARMs that have a probable risk of default 120 days in advance of reset.

These new guidelines have been put in place to make HOPE NOW a more effective tool for distressed borrowers.