The Hope for Homeowners program, enacted three months ago along with the housing bill passed in July and officially effective on Oct. 1, targets borrowers at risk of default and foreclosure, and helps them “refinance into more affordable, sustainable loans,” according to HUD. However the lenders who have signed up to participate in the program and are listed on FHA's website as participating are running into major roadblocks from the investors holding the original notes and also from investors not willing to buy the loan on the other end.

For their part, potential buyers appear hesitant to acquire what they see as the high risks associated with these refinanced debts, since participation in the program typically requires borrowers to be delinquent in the first place, according to one independent mortgage banker who asked not to be named in this story. “It seems to us like they created a great program but nobody’s willing to step up to the plate and take a lead on it, to extend this to borrowers,” the source said.

Two banks, Wells Fargo and Chase, confirmed they are participating in the H4H program, but only for loans already in their portfolios, and not as an investment in H4H loans that come out of mid-tier lenders or independent mortgage bankers. Spokespeople from both Wells and Chase said the banks are eager to offer H4H refinancing for their current customers, but expect a slow start on that end. Chase also announced Friday a separate “mass mod” program for its most troubled borrowers.

Read More Here:
http://www.housingwire.com/2008/11/04/mid-tier-lenders-shut-out-of-hope-for-homeowners-sources-say/

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