Updates from December, 2012

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  • FHA says flip away -- within limits

    1:18 pm on December 13, 2012 | Comments:0
    Tags: , , flipping,   Filed under: Consumer news and advice, Federal Goverment, FHA, investment, The Housing Market

    Temporary waiver of 90-day ‘anti-flipping’ rule extended through 2014

    By Ken Harney, Monday, December 3, 2012.

    Inman News®

    Good news for single-family home investors, rehabbers and buyers seeking to use low down payment FHA financing: The temporary waiver of FHA’s 90-day “anti-flipping” rule was extended last week through 2014.

    The waiver, which facilitates purchases of homes from sellers who have held title to their properties for less than 90 days, continues a policy first adopted by the Obama administration in 2010.

    Starting in 2003, FHA had imposed the 90-day standard as part of an effort to rein in rampant quick-flips of houses where investors made minimal or no improvements to rundown, foreclosed or abandoned houses, then sold them days or weeks later at high price markups with the help of inflated appraisals to purchasers using FHA loans.

    Those flips frequently involved collusion and fraud by teams of mortgage loan officers, realty agents and appraisers — even straw buyers who defaulted and disappeared without making a single payment — and racked up significant losses to FHA’s insurance fund. Neighborhoods suffered because the properties remained empty and in bad physical condition, depressing values of houses in the immediate vicinity. (More …)

     
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  • More Buyers Choose Conventional over FHA Loans

    9:40 am on September 27, 2012 | Comments:0
    Tags: , , ,   Filed under: Buyer Info, Consumer news and advice, Credit, Federal Goverment, FHA, Finance, mortgage

    The use of mortgage financing in the housing market jumped sharply in the month of August, but the use of FHA financing declined, suggesting the government program is losing favor and private lenders are gaining market share.

    “Conventional mortgages are making a comeback while FHA mortgages are not,” commented Thomas Popik, research director for Campbell Surveys. “Reasons for the growth in conventional mortgages include low rates, increased underwriting of high LTV mortgages by private mortgage insurers, and a price structure including insurance premiums that is cheaper than the FHA alternative.”

    Mortgages were used to finance 68.9 percent of home purchase transactions in August, up from 67.5 percent in July. Significantly, not all mortgage financing products saw the same gains in market share. FHA-financed transactions rose only slightly from 25.5 percent in July to 25.9 percent in August. Back in January, FHA transactions accounted for 27.3 percent of all home purchase transactions.

    Ellie Mae reported last week that the FHA share of mortgage originations has declined from 25 percent in May to 21 percent in August. During the same period, conventional mortgages increased their sales from 65 to 70 percent of all new mortgages. Purchase mortgages increased from 44 to 47 percent.

    Real estate agents responding to the latest HousingPulse survey indicated mortgage availability has improved over the summer months, especially for homebuyers with less than 20 percent cash down payments. “Mortgages for homebuyers with less than 20 percent down were available more than in previous months,” commented an agent from California. “Contrary to media reports, there is no shortage of mortgage money available for buyers with down payments less than 20 percent,” reported an agent in Texas.

    Real estate agents also commented on historically low interest rates. “Amazing rates – less expensive to pay mortgage per month than to rent. Unbelievable opportunity and buyers know it,” exclaimed an agent in California. “The money is almost free, with 3.785 percent being about average for a 30 year fixed-rate mortgage with 3.5 percent down,” contributed an agent in Washington State.

    The National Association of REALTORS® is continuing its battle for greater access to credit. Last week NAR’s president Moe Veissi urged Fed Chairman Ben Bernanke to weigh in on three key rule proposals—the Qualified Mortgage (QM), the Qualified Residential Mortgage (QRM), and the Basel III capital standards—that Veissi said are both putting a chill on lending and have the potential tighten credit further. All three individually and certainly together have the potential to tighten credit.

    For more information, visit http://www.realestateeconomywatch.com

    http://rismedia.com/2012-09-26/more-buyers-choose-conventional-over-fha-loans/

     
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  • New Short Sale Guidelines for GSEs Will Make Process Easier

    9:35 am on September 6, 2012 | Comments:0
    Tags: , , , ,   Filed under: Agent information, Buyer Info, Consumer news and advice, FHA, mortgage, Seller Info, Short Sale

    Starting November 1, 2012, Fannie Mae and Freddie Mac will implement new short sale guidelines to make the approval process easier for eligible borrowers.

    “These new guidelines demonstrate FHFA’s and Fannie Mae’s and Freddie Mac’s commitment to enhancing and streamlining processes to avoid foreclosure and stabilize communities,” said
    FHFA Acting Director Edward J. DeMarco in a statement. “The new standard short sale program will also provide relief to those underwater borrowers who need to relocate more than 50 miles for a job.”

    The changes are part of the FHFA’s Servicing Alignment Initiative and will require a streamlined approach with documents, leading to a reduction in documentation requirements. For example, borrowers who are 90 days or more delinquent and have a credit score lower than 620 will no longer be required to provide documentation for their hardship.

    (More …)

     
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  • Housing Survey Shows Consumer Attitudes Demonstrative of Macroeconomic Indicators

    9:14 am on July 12, 2012 | Comments:0
    Tags: business outlook, , ,   Filed under: Agent advice, Consumer news and advice, economy, Federal Goverment, FHA, Home owner information, Housing Market, Real Estate Trends, Seller Info

    By Pete Bakel

    Housing market confidence among Americans continues to trend in a positive direction despite stalling optimism about the economy and personal finances, according to results from Fannie Mae’s June 2012 National Housing Survey. Results indicate flattening economic trends may be contributing to waning consumer expectations about their personal financial situation. Nevertheless, Americans’ continued positive sentiment about housing appears to remain buoyed by low house prices and interest rates at historically low levels.

    “While consumers remain cautious about the general economy, their attitudes toward the housing market continue to improve,” says Doug Duncan, senior vice president and chief economist of Fannie Mae. “Although this positive trend may be short-lived if the general economy falters, one might ask whether consumers are increasingly seeing the current environment as a unique opportunity to buy a home while home prices remain depressed, rental costs are increasing, and interest rates are near historic lows.”

    (More …)

     
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  • Mortgage Forgiveness Debt Relief Act: Will It Be Extended?

    9:23 am on May 17, 2012 | Comments:0
    Tags: , debt relief, , ,   Filed under: Consumer news and advice, Federal Goverment, FHA, Finance, Foreclosure, Home owner information, Income Tax, mortgage, Tax, Tax credit

    by The KCM Crew on May 16, 2012

    Many of our readers have asked whether or not we believe the Mortgage Forgiveness Debt Relief Act of 2007will be extended past its current expiration scheduled for the end of the year. As a reminder, the legislation ensures that homeowners who received principal reductions or other forms of debt forgiveness on their primary residences do not have to pay taxes on the amount forgiven.

    The reason this act is important in today’s housing market is that, without the act, debt is reduced through mortgage modifications or short sales qualifies as income to the borrower and is taxable. If the legislation is not extended, then it would require homeowners to complete a short sale or modification prior to year’s end in order to avoid a tax consequence.

    (More …)

     
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  • 79 Percent of Refinancing Homeowners Maintain or Reduce Mortgage Debt in First Quarter

    8:33 am on May 10, 2012 | Comments:0
    Tags: , , , ,   Filed under: Consumer news and advice, Credit, Federal Goverment, FHA, Finance, Home owner information, mortgage

    Freddie Mac (OTC: FMCC) released the results of its first quarter refinance analysis showing homeowners who refinance continue to strengthen their fiscal house.

    In the first quarter of 2012, 79 percent of homeowners who refinanced their first-lien home mortgage either maintained about the same loan amount or lowered their principal balance by paying-in additional money at the closing table. Of these borrowers, 58 percent maintained about the same loan amount, and 21 percent of refinancing homeowners reduced their principal balance; the share of borrowers that kept about the same loan amount was the highest in the 26-year history of the analysis.

    “Cash-out” borrowers, those that increased their loan balance by at least five percent, represented 21 percent of all refinance loans; the weighted average cash-out share during the 1985 to 2008 period was 50 percent. (More …)

     
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  • Another Refi Boom?

    9:36 am on March 8, 2012 | Comments:0
    Tags: , , ,   Filed under: Consumer news and advice, Credit, FHA, mortgage, The Economy

    by Dean Hartman on March 8, 2012

    There have been a few developing (and some already existing) programs that are worth mentioning, as the newspaper headlines applaud the opportunity. With interest rates remaining at near historic lows for quite some time, many people have been unable to take advantage of these rates because of problems in securing a high enough appraised value.

    To that end, here are a few thoughts to consider:

    New FHA Streamline Announcement

    HUD announced that they will be rolling back the insurance premiums on this program for loans closed prior to June 2009. The Upfront Premium (the one that is added into the loan amount) will be .01% and the annual premium (the one that is paid in the monthly payment) will be slashed to .55%. These cuts could reduce borrowers’ expenses drastically. This program can be done where the lender pays the closing costs – without an appraisal, income verification, or even a credit check. Most lenders will look for a good mortgage payment history.

    The VA IRRL – (Interest Rate Reduction Loan)

    For people with existing VA mortgages, this program allows reasonable closing costs to be added into the loan. There is no new appraisal required, nor is there an income calculation. Basically, as long as the veteran is getting a payment at least $50 lower, it is good to go. In some cases, veterans may choose to reduce the term of their loan (instead of a monthly savings). This can be done with some documents delivered to the lender.

    HARP 2

    This is a program for loans currently owned by Fannie Mae and Freddie Mac wherein the house is underwater. Under this program, lenders may be able to reduce your interest rate despite your loan-to-value. Each mortgage investor is developing their own underwriting and risk criteria, but the good news is that people with good payment histories can take advantage of the great rates – even though their home has declined in value.

    I gave you a very general overview of some loan products here today. There are many considerations (ex. closing costs and time you intend to stay in the home) and qualification items that will pertain to your individual circumstance. My intent was to heighten awareness and get you to reach out to your favorite mortgage professional and see if there is an opportunity for you.

    http://www.kcmblog.com/

     
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  • Two Things You May Have Missed

    2:53 pm on February 23, 2012 | Comments:0
    Tags: , , , , , , , lenders,   Filed under: Buyer Info, Consumer news and advice, Federal Goverment, FHA, Insurance, Interest Rates, mortgage

    by Dean Hartman on February 16, 2012

    Before the end of the year, Congress and the President agreed to extend the payroll tax cut. In that bill, there were two items of interest for those involved in real estate.

    1.) The hike in the Guarantee Fees charged by the GSEs Fannie Mae and Freddie Mac.

    The 10 basis point increase in the fees has translated to a .375% to .5% increase in mortgage rates for conventional loans. Many customers who started their loans a couple of months ago are being “surprised” with higher than expected rates. Heck, everything you read in the papers says rates are at historic lows and will likely stay there through 2014. Many consumers feel as if their lender is being unscrupulous. However, your lender has fallen victim to the increase in Guarantee Fees and how the secondary market is passing on the cost. What looks like possible lender greed is just a passing on of the increased expense imposed by the government. Sadly, the increased revenue isn’t even being used to help aid an ailing Fannie Mae or Freddie Mac. It is being turned over to the US Treasury to cover the temporary extension of the payroll tax cut.

    2.) Permission for HUD to increase the insurance premiums they charge on FHA loans.

    If you remember, HUD charges two insurance premiums – a monthly one and an up-front one that is usually added into the loan. Most recently, they reduced the up-front mortgage insurance premium (UFMIP) and dramatically raised the monthly fee (MMIP). It is widely anticipated that, maybe as soon as April, we will see a hike in the UFMIP with no adjustment to the MMIP. While this will help shore up the reserves in the insurance fund, it will simultaneously make buying a home more expensive. No one knows the effective date or amount of the increase. Buyers should look to buy before the increase in fees.

    We always hear how our government officials tuck away things in their bills. In this case, while the headlines during the holidays praised Washington for preserving the payroll tax cut, they may have hurt us more in the long run.

    http://www.kcmblog.com/2012/02/16/two-things-you-may-have-missed/

     
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  • FHFA Sends Congress Strategic Plan for Fannie and Freddie

    2:45 pm on February 23, 2012 | Comments:0
    Tags: , , FHFA, , ,   Filed under: Business Development, Buyer Info, Consumer news and advice, economy, Federal Goverment, FHA, Housing Market, mortgage, The Housing Market

    Federal Housing Finance Agency (FHFA) Acting Director Edward J. DeMarco recently sent to Congress a strategic plan for the next phase of the conservatorships of Fannie Mae and Freddie Mac (the Enterprises).

    The plan builds on the Acting Director’s February 2010 letter to Congress on the conservatorships and sets forth objectives and steps FHFA is taking or will take to meet FHFA’s obligations as conservator. Fannie Mae and Freddie Mac were placed into conservatorships Sept. 6, 2008 and have since received more than $180 billion in taxpayer support. (More …)

     
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  • Underwater Refinance Program Expanded

    2:07 pm on October 27, 2011 | Comments:0
    Tags: , , , , , , , Refinancing   Filed under: Consumer news and advice, Federal Goverment, FHA, Foreclosure, Home owner information, mortgage

    by Dean Hartman on October 27, 2011

    At a campaign stop in Nevada on Monday, President Obama announced an expansion of the HARP (Home Affordable Refinance Program) which would eliminate the current maximum LTV of 125%. The initiative is being looked at as a way to reward those homeowners who have been good payers of their mortgages but, because of declining home values, they could not take advantage of today’s lower interest rates.

    While the actual details on the program will not be released until next month, here’s the buzz:

     

    • It will only pertain to loans currently being serviced by Fannie Mae or Freddie Mac
    • Because of the removal of the LTV cap, appraisals may not be required
    • With the only qualifying criteria announced being that the last six payments be on time, it is possible that income documentation may be streamlined and credit scores might be more forgiving
    • Fees allegedly will be reduced
    • Incentives may be offered to people who shorten their repayment time
    • It also sounds that the banks may be given some incentive by not holding them liable for the underwater portion of the new loan (a major incentive for sure).

    The government is on the hook for these loans already. By lowering the payments (by offering lower rates), they will likely help these loans to continue to perform and make it less likely for the underwater homeowner to walk away.

    The original HARP was expected to help 5 million families.  After two years, it has yet to reach 900,000; therefore, estimates ranging from 800,000 to 1.6 million borrowers who may benefit need to be taken with a grain of salt.

    Whether the Administration is looking for purely political rhetoric points or not, my advice to underwater homeowners is too keep an eye out for the final guidelines because you just might be able to lower your payments.

     
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