by Erin LaBuda

Much has been said about the foreclosure situation on the media, but I haven't heard much about the Hope Now initiative that is designed to provide some relief from these circumstances.  Here is some information that homeowners who are facing a possible default should know:

First, a national counseling hotline is available on a 24/7 basis at 888-995-4673 (888-995-HOPE).  This will ut you in contact with a HUD-approved counselor affiliated with the non-profit Homeownership Preservation Foundation. This counselor will gather information regarding the caller's financial situation and help determine if you are eligible for the initiative.  Even if you are not eligible (this program is designed for purchase-money mortgages exclusively that were secured between 1/1/05 and 7/31/07 and whose rates will reset between 1/1/08 and 7/31/10) the counselors will help with any questions a troubled borrower might be facing.

Second, the counselor will lay out different options available and, in particular, the option that is best for you.  If you are eligible for the Hope Now initiative, there are 3 possible solutions.  First, there are owners who are able to stay current even with a rate reset.  These homeowners will be educated and directed as to the best refinancing options and how to minimize any prepayment penalties.  Second, there are the owners who will face default even after a rate reset.  For these homeowners who qualify, they will receive counseling and a rate freeze that is available for up to five years.  Third is the owner who is already in default.  These homeowners will be advised about options such as a short-sale or deed in lieu of foreclosure where the borrower may receive debt forgiveness as a part of a loan workout over the next three years and won't have to pay federal tax on the foregiven amount.

Last,ly, and probably most importantly, if you don't call, you won't know what you are eligible for or how to mitigate the loss.  The counselors are abailable to help any troubled borrower in any situation and want to provide the best course of action so that you can move forward with your life.