Hope Now: What Is It?

HOPE NOW is a private sector alliance of mortgage servicers, non-profits, counselors, and investors that have assisted many homeowners avoid foreclosure. They have developed a new program in conjunction with the U.S. Treasury, the Federal Housing Finance Authority, Fannie Mae, Freddie Mac and other mortgage loan servicers for “at-risk” homeowners.

The plan, which goes into effect on December 15, 2008, helps modify existing mortgages in an effort to keep homeowners in their home. The homeowner must be in arrears 90 days or more. The mortgages must be held by Freddie Mac, FNMA or other participating lenders/servicers.

Upon obtaining homeowners detailed information, the plan will reduces the homeowner’s monthly payment to 38% of the borrower’s monthly income. The process could include all or some of the following to accomplish the reduction:

• Extend the term of the loan
• Interest rate reduction
• Principal forbearance

The HOPE NOW alliance has proven success this year in contacting distressed home owners to encourage them to work things out. They offer a toll-free hot line at NO COST to callers in need of advice. To learn more about HOPE NOW visit their website.

Home Prices Expected to Fall Even More

Home prices are down 20% nationwide since their peak in July 2006, according to the S&P/Case-Shiller home price index. Economist Nouriel Roubini of New York University, who accurately predicted the housing slide and credit crisis, expects another 20% decline in home prices in the next year. Patrick Newport of economic forecasting firm Global Insight projects a 15% drop.

The damage will likely hit even areas that have so far escaped many problems.

The action plan if you're selling:

• Wait it out

In 2010, real estate should be stronger, with fewer homes clogging the market. So if you can wait until then to sell, do it.

• Make your place shine

In many markets, sellers will face the toughest competition not from fellow homeowners but from banks and builders. Both will be willing to cut prices dramatically to sell a foreclosed or new home.

To convince buyers that your house is worth paying up for, make sure that it's in move-in condition (foreclosures almost certainly won't be). Point out unusual qualities like wide-plank floors or stained glass that cookie-cutter new construction lacks.

• Price it below market

Find out how much nearby homes fetched recently. Once you've figured out what a buyer might pay, price your house 5% below that.

Sound painful? A recent study by a New Jersey appraiser found that houses priced below market ended up selling for more than similar houses listed above market. That's because lower prices attract more buyers.

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Homeowners Under Water

ationwide, almost one out of every five homeowners with a mortgage owes more to their lender than their properties are worth. But if you subtract the states where nearly 60% of all homeowners are "under water" (owing more on their mortgage than the home is worth), which includes California, Florida, Arizona, Georgia and Michigan, the rate drops to about one in 10, according to a report released recently by First American CoreLogic.

Rising mortgage rates are making matters worse for prospective borrowers. The rate on a 30-year, fixed-rate mortgage has increased sharply over the past couple of weeks, according to Freddie Mac.

Higher rates coupled with lower home values means fewer people can tap their home equity. The percentage of U.S. homeowners who pulled cash out of their homes remained at a four-year low in the third quarter of this year.

ARE YOU UNDER WATER? : Have falling home prices affected your plans to relocate or refinance? If so, tell us about it by using the "comment" link below. Your identity remains private, as your email address will never be published on this site, even though it is needed in order to post a comment. We'd be interested to hear from you as to how (if at all) mortgage rates and home values are affecting your plans right now.

Temporary Jobs: The Best 5

With the holidays just around the corner, and the economy in bad shape, many people are looking for ways to find that extra shopping money this year. Our Money editor, Stacy Johnson, has a few ideas for finding the best temporary jobs, and even temporary jobs that could lead to full time jobs. Video runs 1:35…

If you have comments or questions about this video, feel free to chime in by using our "Comment" link below. We'd love to hear from you.

Bad Insurance Buys

Modern life isn't cheap… so it pays to make sure you're not wasting money on anything. And that includes insurance. Are you paying for unnecessary insurance? Money Editor Stacy Johnson helps you find out in this short (1:26) video…

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