'Hope for Homeowners Changes Will Take Time'

Recent legislative changes to the Hope for Homeowners program that are expected to boost lenders participation in the special FHA refinancing program will take some time to implement, according to housing secretary Steve Preston. The Emergency Economic Stabilization Act signed by President Bush on Oct. 3 amends the Hope for Homeowners (H4H) program so the lender does not have write down the loan amount all the way to a 90% loan-to-value ratio and it allows second lien holders to be paid off in cash. "It may encourage more lenders to come into the program," the Department of Housing and Urban Development secretary told reporters. However, HUD will very likely have to issue a propose rule for public comment. "It will take some time to implement that," Mr. Preston said. Meanwhile, HUD will be watching to see how aggressively lenders adopt the H4H program and start refinancing borrowers with underwater mortgages. Secretary Preston noted, however, that lenders have other workout options, including the expanded FHA Secure program and they can decide to modify the loan on their own. The private Hope Now initiative has completed 2.3 million workouts since it was launched last year, he said.