On November 19, the Housing and Urban Development Secretary Steve Preston announced that the HOPE for Homeowners Board of Directors has approved three changes to the program. The changes are designed to reduce the costs of the program and to expand eligibility, allowing more distressed borrowers to participate. The changes are:  

  • Increasing the loan-to-value ratio to 96.5% for borrowers whose mortgage payments represent less than 31% of their gross monthly income and who have low household debt. Borrowers with a higher debt load will continue to be offered a 90% loan-to-value ratio.
  • Offering subordinate lienholders immediate payment in exchange for releasing their liens. Previously, those who released their liens had to wait for the property to be sold to receive payment, which was not guaranteed.
  • Permitting lenders to extend mortgage terms from 30 to 40 years. For some borrowers, this may lower their monthly payments enough that they can afford to keep their houses.