Archive for January, 2010

Pennsylvania Mortgage Relief

by Justin Miller on January 26, 2010 in Bailout, Foreclosure, Loan Modification with No comments

What can I say PA knows how to do it.  Okay, I’m from PA so I am biased.  According to the article it seems PA is providing short term aid to those who are suffering from a hardship such as jobless which is exactly who we should be helping.

I received a call from someone yesterday that lost their job and they aren’t getting any help from Bank of America.  I told him to ask for a forbearance of 6 months which can give him time to get a new job.  Why are the people who really need it the most and can clearly show a hardship not getting help?  Anyone can play with their debts and income to make it look like it’s a hardship but if someone lost their job, could afford it prior to, then help them out!!  They are trying to duplicate this in other states and has already been copied by a handful. 

“Pennsylvania’s Homeowners’ Emergency Mortgage Assistance Program was created in the 1980s in response to job losses in the steel and coal industries. With funding tight, the approval rate for new loans in the Pennsylvania program has fallen to about 22% from a high of more than 40% in the 1980s. Roughly 80% of loans involve one-time payments, with just 20% going to borrowers who need continuing help with their mortgage payments for up to three years.”

http://online.wsj.com/article/SB20001424052748704561004575013263982822140.html#mod=todays_us_page_one

Helping FHA Borrowers Facing Imminent Default

by Justin Miller on January 26, 2010 in FHA Loans, Loan Modification with No comments

Here is the mortgagee letter from FHA.  Click on the link below to read it in it’s entirety. 

“FHA defines an “FHA borrower facing imminent default” to be an FHA borrower that is current or less than 30 days past due on the mortgage obligation and is experiencing a significant reduction in income or some other hardship that will prevent him or her from making the next required payment on the mortgage during the month that it is due. The borrower must be able to document the cause of the imminent default which may include, but is not limited to, one or more of the following types of hardship……” 

http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/10-04ml.pdf 

Will Low Interest Rates End?

by Justin Miller on January 25, 2010 in Interest Rates with No comments

Many believe they will once the Fed stops buying mortgage-backed securities at the end of March.  I think they need to continue to do it but I very well may end up being wrong.  I would still lock an interest rate before that because that is a large gamble but I just think we need low interest rates to continue.

Although the Fed has argued that low interest rates caused the housing mess that couldn’t be further from the truth.  Maybe we won’t need the Fed to continue buying mortgage bonds if others show interest in them.  Especially since we are starting to see that there isn’t this rapid growth that everyone speaks of and many will still look for a safe haven like Treasuries and Mortgage bonds.  Why would you want to own mortgage-backed securities?  They may become more attractive if the supply is to drop which is expected. 

http://www.msnbc.msn.com/id/35053587/ns/business-us_business/   

Housing Is Better Than The Numbers

by Justin Miller on January 25, 2010 in General News with No comments

The article below makes some good points about how sales growth won’t pick up until February and March and that the good news is home price declines have slowed. 

A lot of this may have to do with the tax credit and the argument is that the tax credit takes away from future demand.  They may have some truth to it but there are also people who would not have bought had it not been for the credit or they bought years earlier because of it.  If that is the case they may end up selling and buying in a few years when originally that is when they bought their first home.  Only time will tell. 

http://online.wsj.com/article/SB10001424052748703415804575023151304859446.html?mod=rss_economy

Getting Help Before You Fall Behind

by Justin Miller on January 23, 2010 in Foreclosure, Loan Modification with No comments

If you have an FHA mortgage.  It is about time that someone implements this.  I am amazed by how many people tell me that their bank said they can’t help them because they are current on their mortgage.  And some banks tell the borrower to fall behind on purpose so they can get help. 

“On Friday, the Federal Housing Administration announced that it will assist borrowers before they become delinquent. All you need do is prove your problems were caused by a reduction of income from a job loss, fewer paid hours, slashed wages or a decline in self-employed business earnings.”

http://money.cnn.com/2010/01/22/real_estate/easier_FHA_help/index.htm?section=money_realestate&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_realestate+%28Real+Estate%29

Information On Filing Your Tax Credit

by Justin Miller on January 23, 2010 in Mortgage Education 101 with No comments

This is very informative from Kiplinger’s Letter.  “The IRS is beefing up oversight of the home buyer credit to stop bogus claims.  To get the credit, filers must attach more documentation to Form 5405, which has been revised by the Service.  A signed copy of the settlement statement must now accompany the form.  Mobile home buyers who don’t have the document should include the signed sales contract.  Likewise, filers who have a residence built for them should instead attach a copy of the certificate of occupancy to their 5405.  The service also wants information from buyers who are claiming the $6,500 credit.  They should enclose Form 1098 or records of property taxes or insurance coverage to document that they owned the home for five consecutive years out of the last eight.

Filers taking the credit on their 2009 returns must use the new 5405, which is dated Dec. 2009.  If you are claiming the credit for a 2009 home purchase on an amended 2008 return you must use the revised 5405 if the home was bought after Nov. 6, 2009.  Use the 2008 version for home purchased before Nov. 7, 2009

Returns claiming the credit CANNOT be e-filed because of the attachment rules.  And the IRS won’t start processing 2009 returns with 5405s until mid-Feb., when it expects to have its computers reprogrammed to handle the rule changes.  Factoring in the extra processing time needed for paper returns, the first refunds for returns claiming the home buyer credit will not be issued until late March.”

Fannie Mae’s “Special Approved Designation” For Condos In Florida

by Justin Miller on January 22, 2010 in Conventional Loans, Guideline Changes with No comments

If you want to see what projects have been added to the list you can click on this link https://www.efanniemae.com/syndicated/documents/dps/condopud/FL_Spcl_Aprvl.pdf 

I found the FAQ’s very informative on the process for approving the condos.  Here is what stuck out to me:

Can a homeowners’ association (HOA), property manager, or lender submit a project for consideration?

No. Fannie Mae determines the projects for review. Lenders can suggest projects, but Fannie Mae retains the discretion to decide which projects are reviewed.

If a project meets all of Fannie Mae’s standard project eligibility requirements, can the project receive a Special Approval designation?

No. The Special Approval process is for established projects that do not meet Fannie Mae’s standard project eligibility requirements. For projects that meet our standard eligibility requirements, there are several review options available, including: “Limited Review,” “CPM™ Expedited Review,” and “Lender Full Review.”

To read the FAQ’s in their entirety, click on the link below. 

https://www.efanniemae.com/sf/guides/ssg/relatedsellinginfo/condogls/pdf/specialappfaqs.pdf 

FHA Mortgagee Letters On Changes Announced

by Justin Miller on January 22, 2010 in FHA Loans, Guideline Changes with No comments

Here is what HUD put out to all of their email subscribers which is the exact language you want to read. 

FHA Announces Policy Changes to Address Risk and Strengthen Finances:
New Measures Will Help FHA Better Manage Risk, While Maintaining Support for the Housing Market and Access for Underserved Communities

FHA Commissioner David Stevens announced on 01/20/10 a set of policy changes to strengthen the FHA’s capital reserves, while enabling the agency to continue to fulfill its mission to provide access to homeownership for underserved communities. The changes announced are the latest in a series of changes Stevens has enacted in order to better position the FHA to manage its risk while continuing to support the nation’s housing market recovery.

The FHA will propose to take the following steps: increase the mortgage insurance premium (MIP); update the combination of FICO scores and down payments for new borrowers; reduce seller concessions to three percent, from six percent; and implement a series of significant measures aimed at increasing lender enforcement…

To read this press release in its entirety please visit: http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-016

Effective for FHA loans for which the case number is assigned on or after April 5, 2010, FHA will collect an upfront mortgage insurance premium of 2.25 percent. This policy change will increase premiums for purchase money and refinance transactions, including FHA-to-FHA credit-qualifying and non-credit qualifying streamlined refinance transactions…

To read these mortgagee letters and any attachments in their entirety, please visit: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/ view the 2009 letters and click on the letter of your choice. Mortgagee Letters from previous years can be found on the same page.

Treasury To Fix the Foreclosure Program

by Justin Miller on January 22, 2010 in Bailout, Foreclosure, Loan Modification with No comments

All I can say on this topic is if you are trying to get a loan modification then good luck.  I guess we will see what comes of it but again don’t get your hopes up even when they are talking about doing principle reductions, again. 

Even though I do think the only correct way to modify the loans is to do a principle reduction it does create a moral hazard and many will try to get one even though they don’t need it.  One person can ruin it for everyone.  I feel very bad for those who legitimately could afford their home but are now unable to because their income has be reduced or they lost their job.

“Many economists and mortgage experts have concluded that banks must ultimately forgive loan balances to restore equity to underwater borrowers. Otherwise, growing numbers will walk away from their homes and accept foreclosure rather than make payments on properties in which they no longer own a stake.  The Treasury has resisted calls to push lenders to write off loan balances, concerned that such a course would either threaten the health of banks by forcing them to swallow billions of dollars in write-offs or cost taxpayers additional money.”

http://www.nytimes.com/2010/01/22/business/economy/22modify.html 

The Wealthy & Their Mortgage Problems

by Justin Miller on January 21, 2010 in Jumbo Mortgages with No comments

The part of this article that really stuck out to me in the article was about second homes.  Unfortunately many in the past and still in the present try to convince someone that the property they are buying will be a second home so they can get a better rate. 

So many people do this and have ruined it for the rest of us. 

“Susan Bruno has a client who was turned down for a mortgage twice — despite an 800 credit score, more than adequate down payment and plenty of income. The problem was that the client wanted to buy a second home. And because the client would not, could not, swear that he would occupy the home at least 75% of the time, lenders weren’t interested.”Mortgages for second homes have been tough to get the past couple of years,” said Gumbinger. “A lot of second-home areas, like in Florida and Arizona, are among the most challenging markets.”

http://money.cnn.com/2010/01/20/real_estate/mortgage_woes_for_wealthy/index.htm?section=money_realestate&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_realestate+%28Real+Estate%29 

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