Chairman of the Senate Banking, Housing and Urban Affairs Committee Sen. Chris Dodd, D-Conn., has announced the enactment of the HOPE for Homeowners program, a voluntary initiative designed to help distressed borrowers refinance their mortgages.
HOPE for Homeowners was established as part of the Housing and Economic Recovery Act (HERA), comprehensive housing legislation that Dodd authored along with Sen. Richard Shelby, R-Ala., and Rep. Barney Frank, D-Mass. HERA was passed by Congress and signed into law by President Bush in July.
Lenders have a strong incentive to participate, Dodd notes. Even though the program is voluntary and lenders will have to take significant losses to benefit from the program, these losses would be far less than they would incur if the property enters into foreclosure. Borrowers may use any government-approved lender, as long as their current lenders or investors agree to take the write-down in value.
Source: Office of Sen. Chris Dodd