Divittorio Real Estate » Government efforts to help the Real Estate/Mortgage industry

HAMP

MarkDevo — Mon, 30 Jan 2012 16:30:21 +0000

Changes announced Friday to the administration’s Home Affordable Modification Program (HAMP) are expected to extend relief to a larger share of struggling homeowners as well as renters, according to federal officials.

One of the key adjustments to the program centers around principal reductions. HAMP currently includes an option for servicers to provide underwater homeowners who are struggling with their payments with a modification that includes a principal writedown.

To encourage investors to agree to principal reduction modifications, Treasury is tripling the incentives for such restructurings, paying from 18 to 63 cents on the dollar, depending on the degree of change in the loan-to-value (LTV) ratio.

The Federal Housing Finance Agency (FHFA) has prohibited Fannie Mae and Freddie Mac from employing HAMP’s principal reducing option for their borrowers. Treasury has notified FHFA that it will pay these same principal reduction incentives to Fannie and Freddie if they allow servicers to forgive principal in conjunction with a HAMP modification.

FHFA issued a statement in response noting that it recently released analysis concluding principal forgiveness does not offer any greater benefits than principal forbearance as a loss mitigation tool.

But the agency says it will reassess the investor incentives now being offered, taking into consideration the number of eligible loans, operational costs to implement such changes, and the potential effects of incentivizing borrowers to remain current.

Among the other changes announced, borrowers who are struggling because of debt beyond their mortgages, such as second liens and medical bills, will be eligible for an alternative program evaluation with more flexible debt-to-income criteria.

In addition, Treasury will expand eligibility to include investor properties that are currently occupied by a tenant as well as vacant properties slated for rental use.

Tim Massad, Treasury’s assistant secretary for financial stability says single-family homes serve an important function as affordable rental housing, and foreclosure of investor-owned homes has disproportionate negative effects on low- and moderate-income renters, as well as communities.

The deadline for HAMP will be extended for an additional year through December 31, 2013.

To date, HAMP has helped approximately 900,000 struggling homeowners permanently modify their mortgage loans, providing them with a median savings of more than $500 a month.

Massad says the administration is committed to a multi-pronged effort to support American homeowners and the housing market recovery.

In addition to foreclosure prevention initiatives such as HAMP, Massad says the federal government plans to focus on transitioning foreclosed properties into rental housing, making it possible for responsible homeowners to refinance, and providing hard-hit states with resources to develop targeted relief programs.

HUD announces nationwide first-look program

MarkDevo — Thu, 16 Sep 2010 15:30:41 +0000

The U.S. Dept. of Housing and Urban Development recently announced a new agreement with the nation’s top mortgage lenders to offer select state and local governments, including California, and nonprofit organizations a “first look” or right of first refusal to purchase foreclosed homes before making the properties available to private investors.

The National First Look Program is the first-ever public-private partnership agreement between HUD and the National Community Stabilization Trust and is intended to give communities participating in HUD’s Neighborhood Stabilization Program a brief exclusive opportunity to purchase bank-owned properties in certain neighborhoods so the homes can be rehabilitated, rented, resold, or demolished.

The FHA’s “Short Refinance” program

MarkDevo — Wed, 15 Sep 2010 15:26:27 +0000

The Obama administration recently announced a new program to help underwater homeowners who are current on their mortgage payment refinance into a new FHA-insured loan.

FHA Guidelines set to change

MarkDevo — Sat, 30 Jan 2010 02:20:53 +0000

FHA, the most popular loan program available is going to change soon.

FHA currently allows the buyer to put as little as 3.5 percent down. Changes in FHA guidelines will require that the buyer put at least 5 percent down-a significant increase of cash reserves required of the buyer at the closing table.
Another FHA guideline set to change is that a one time, up front mortgage insurance premium will increase from 1.75% 2.25% of the loan amount.
The monthly mortgage insurance is going to increase. This insurance is calculated by multiplying the base amount of the loan times .055 and then dividing that number by twelve. The exact increase is unknown but may go up to as much as .1 rather than .055. This insurance is mandatory for 5 years on FHA loans.
Some real estate experts say that FHA guideline changes will happen April 5th 2010. Others sources like Realty Track claim changes will take place in the summer.
Another important FHA guideline change is that the maximum allowable seller credit has been reduced from 6 percent to 3 percent. So, the buyer will have to come to the closing table with more cash because sellers can only credit the buyer (at close) up to 3 percent for closing costs. (rather than 6 percent)

The consequence of these changes is that money is more expensive to borrow and more cash is needed at the closing table.

Loan Limits for Feddie Mac, FHA and Fanny Mae are expect to be extended.

MarkDevo — Sun, 01 Nov 2009 21:37:53 +0000

Good news for the Real Estate Industry and especially those buyers trying to get financing on homes in the upper end price ranges. More than 80 percent of loans are financed through Fannie Mae, Freddie Mac, and FHA. The loan limit was temporarily made to go up to 125 percent of the local median home sales prices or up to $729,750.00 This limit was set to expire at the end of the 2009, but now it is expected to be extended to 2010. This will help those buying in the move-up, and high end markets. The overall effect will help stabilize prices because more buyers will qualify for financing.