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Friday, August 13, 2010

Can interest remain low?

11:56 AM ET - Thomas Hoenig, Kansas City Fed President, states that zero interest rates were a "dangerous gamble" in a period of moderate growth. In a speech in Lincoln, NE, Hoenig warned that Fed Chairman Ben Bernanke and his allies were trying to use monetary policy as a "cure-all" for "every problem faced by the United States today." Keeping rates too low for too long will only lead to a repeat of the cycle of severe recession and unemployment in a few short years, he warned. Hoenig has dissented at every Fed policy meeting this year.

HUD Earmarks $1B for Unemployed Borrowers

HUD just set aside $1 Billion for unemployed borrowers!

Help to unemployed borrowers would come in the form of a $50,000, ZERO interest loan to help make their house payments for up to 2 years.

Those receiving help must have a perfect payment history on their mortgage loan. 

A new $1-billion program led by the Department of Housing and Urban Development, or HUD, will help homeowners who are at risk of foreclosure due to involuntary unemployment, underemployment or a medical condition.

The program could be an asset to seniors who have been unable to pay their tax and insurance obligations on their reverse mortgage.  While there is no official number as to how many HECM borrowers are currently in T&I default, it continues to be a concern for lenders and servicers in the reverse mortgage industry.  Whether or not the program will be available to HECM borrowers isn’t yet clear.

Click here for an article which details the program: HUD Provides $1-billion-of-emergency-loans-to-homeowners

Wednesday, August 11, 2010

Fed Worried About Economy

WASHINGTON -- As recently as two months ago, the Federal Reserve sounded optimistic about the economic recovery. Now the central bank is taking a new step that shows it is clearly more worried, but economists say it probably won't help much.
The Fed said Tuesday that it would spend a relatively small amount of money -- about $10 billion a month, economists estimate -- buying government debt. The move is designed to drive interest rates on mortgages and corporate borrowing at least a little lower and help the economy grow faster.

NegEQ loan with FHA

The FHA "NegEQ" Refinance
On August 6th, 2010, FHA published Mortgagee Letter 2010-23 which details the refinance program available to homeowners that owe more than the value of their homes. Although HUD estimates an economic benefit up to $35 billion, the success will be determined by the current lien holders who must participate by writing down the mortgages at least 10%. The program is for loans whose case numbers are issued on September 7th, 2010 and closed by December 31st, 2012.
Here are the 8 things you need to know about this program:
  1. The mortgage to be paid off CANNOT be an FHA loan and must be current

  2. The max LTV is 97.75% and the max CLTV is 115%

  3. Second lien holders must subordinate to the new first

  4. Loans that receive an "accept/approve" by TOTAL do not require a review of income or credit history

  5. Loans that receive a "Refer" by TOTAL and/or manually underwritten files, the ratios CANNOT exceed 31/50 (31% includes both 1st and 2nds) and must have acceptable credit history with a minimum credit score of 500

  6. Lenders CANNOT use premium pricing to pay off debt to qualify borrower OR bring mortgage current for the borrower

  7. The performance of loans refinanced under the NegEQ refinance WILL NOT be included in the Lender's compare ratio but will have separate criteria in Neighborhood Watch

  8. The borrower must occupy the subject property
Call me for additional details and to apply for this loan.

Tuesday, August 10, 2010

Extension Granted! FHA changes in Mortgage Insurance October 4th...

Tuesday, August 10, 2010
“Last week, FHA Commissioner David H. Stevens announced plans for implementing FHA’s new mortgage insurance premium structure. As we work to publish a Mortgagee Letter, it is our intention to announce that based on industry feedback and our desire to have this change implemented successfully in the marketplace, FHA will make the premium fee changes on all new case numbers effective October 4, 2010.
“Over this past week, the industry responded with support of the new fee structure, but voiced strong concern about having system changes ready in time to meet the original September 7, 2010 deadline. Since these system changes impact regulatory disclosures, lenders expressed they must have the additional time to implement and test systems. FHA took this feedback seriously and has accommodated the need for additional time.”
FHA will lower its upfront premium simultaneously with the increase to the annual premium. FHA’s upfront mortgage insurance premium will be adjusted down to 100 basis points on all amortization terms and the annual mortgage insurance premium will increase to 85-90 basis points on amortization terms greater than 15 years

FHA Announcement: Help for underwater borrowers

On September 7, 2010 FHA will offer certain underwater NON-FHA borrowers a FHA refinance loan.  The borrower can move ahead on the refinance if their present mortgage holder agrees to write off up to 10% of the present loan balance.  FHA anticipates that 3-4 million borrowers will be assisted with this program.  Is this ANOTHER Government bailout program destined to NOT work?  Probably.  More information to follow...

Fannie and Freddie need more money: Cost to taxpayers?

Freddie Mac just announced that it needs $1.8 billion more to handle their 2nd quarter losses.  This brings Freddie's total losses to $64 Billion!

We taxpayers are bailing out Freddie, just like we did other industries before it. Here's a quick reminder of other recent financial losses that taxpayers took the hit for (just to put Freddie's losses in perspective):  AIG=$9 billion, the ENTIRE car industry bailout=$47 billion. 

Are Freddie and Fannie done losing money?  NOT even close.  Short sales and Modifications are up 123% (year over year increase), and forbearances (where distressed homeowners get more time to make their payments) are up 655%!

Excellent home purchase opportunities lie ahead as we see more of the distressed properties enter the market.  Call me to get your mortgage credit approval into place to take advantage of this opportunity.

Monday, August 9, 2010

We enjoyed Marty's professionalism-July 26, 2010 Loan Closing

Marty, Cindy and Brad Kerr at their mortgage loan closing on July 26, 2010.  The Kerr's took advantage of best rates in our lifetimes, excellent 15 year rates, and shortened their loan term.  Congratulations!

Hello Marty --We enjoyed your professionalism and diligence in working with us toward our financial goals. Thanks so much for your efforts on our behalf.    
Brad & Cindy