HOPE for Homeowners holds hazards

Homeowners that are having trouble with their mortgages should tread carefully as they try to renegotiate their loans under the government’s new HOPE for Homeowners program, because the program could keep them trapped in costly agreements. Lenders who voluntarily allow borrowers to refinance under H4H are required to reduce the size of the mortgage to a maximum of 90 percent of the home’s current appraised value. Additionally, they are only allowed to put people in 30-year fixed-rate loans. The government also gets a 50 percent cut of any appreciated value for as long as you own the home, even after you pay off the mortgage.