As an example of a public-private partnership, SPOCH’s HomeKeeper Turnkey Program would use TARP II or other government funds to...
(1) Purchase at a deep discount from mortgage holders nonperforming mortgage notes and pools of nonperforming mortgage notes.
(2) Stop foreclosure and restore affordable homeownership for thousands of qualified, at risk homeowners whose unsuitable mortgage loan terms have resulted in foreclosure.
(3) Recycle newly unaffordable subprime mortgages into performing, profitable mortgage loans which will be sold to the secondary mortgage market.
As a mortgage holder with unilateral modification authority, SPOCH would appoint an HomeKeeper Counselor to meet with qualified homeowners to review options to foreclosure designed to preserve continued, affordable homeownership. The homeowner would provide authenticated updates to current employment and finances. An FHA 203K property appraisal and inspection report would follow to confirm the home's current fair market value - as the basis for a structured loan modification that makes sense for all stakeholders.
In the short term, the loan modification will result in reduced loan payments for the homeowner. Over time, as the economy and housing markets improve, program participants will be required to adhere to a strict budget, and eventually return a portion of the home's appreciated value upon its sale or refinance. The sale of modified, performing mortgages to the secondary market, and the assignment of owners’ equity makes the HomeKeeper program self-funded and not dependent on subsequent government support.
David Petrovich is Executive Director of Society for Preservation of Continued Homeownership, a 501c3 non profit consumer advocacy, and author of Fight Foreclosure: How to cope with a mortgage you can’t pay, Negotiate with your lender, and Save your home! (Wiley & Sons 2008) For more information, visit www.spoch.org, E-mail Mr. Petrovich @ firstname.lastname@example.org, or Jeffrey Ross Williams, Esq., a public policy advisor in Washington, DC, and Loch Arbor, New Jersey @ JRW@spoch.org.
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