Hope Now Provides Help For Some Home Owners

[Aug 4, 2008.]

Help came to homeowners in the past few months thanks to Hope Now. Hope Now is an organization that assists borrowers who have run into financial difficulties and needs help to maintain their homes. Comprised of lenders, counsellors, and other mortgage industry professionals, Hope Now has reported to have helped over 180,000 homeowners in April. This number declined to 170,000 in May but that was to be expected stated Hope Now representatives.

Hope Now has helped 1.7 million homeowners since July of last year by either modifying or establishing a repayment plan for homeowners.

Loan modifications are seen as more helpful especially to the sub prime borrowers whose rates are expected to reset in the coming autumn. By restructuring the original loan agreement, home owners are able to eliminate a portion of the debt or even receive lower interest rates. On the other hand, repayment plans extend the debt’s life and must be paid on top of the regular mortgage payment. Advocates claim that repayment plans are ineffective in turning the tides of the mounting foreclosure rates.

Hope Now has helped 60% of homeowners with repayment plans during the April to May time period. During this same time period, overall foreclosure rates climbed 35% with foreclosure filings rising 7%.

Foreclosures are expected to climb into 2009 and possibly 2010. Other plans to help home owners aside from the loan modification and repayment plans are freezing the introductory rates of the adjustable rate mortgages. The ARMs interest rates tend to be lower then the market value until they reset usually within the first year or two. That resetting interest rate catches many borrowers off guard and unable to make the increase in payments. By freezing the introductory interest rates for at least five years, experts believe that this will allow the market to stabilize.