Archive for the ‘HAMP’ Category

The Latest Distressed Property News

Tuesday, September 6th, 2011

There has been quite a bit going on in the distressed property market as of late, and if you are a homeowner who is underwater or are unable to continue to pay your mortgage, there is some good news on the horizon to help you.

HAMP incentives increased for early borrower assistance: Fannie Mae has increased HAMP incentives to servicers who work out loan modifications with borrowers. HAMP – the Home Affordable Modification Program – is a program that encourages lenders to work with homeowners in issuing loan modifications. It gives financial incentives to the lenders who successfully work modifications. With the new increase, the feds are attempting to sweeten the proverbial pot to encourage even more modifications in lieu of short sales and foreclosures, and the goal is to do so early in the delinquency process. While the lenders still have to agree to issue the modifications, hopefully these extra incentives will push them toward looking more closely at modifications before rushing to initiate foreclosure proceedings.

Housing counseling agencies awarded money by HUD: HUD (The U.S. Department of Housing and Urban Development) has awarded $10 million to housing counseling agencies across the country, in order to strengthen counseling available to struggling homeowners.  The money will be distributed to areas that face high incidences of foreclosures, and is good news for desperate homeowners.

Feds are telling states to design more state-specific programs to help borrowers: Several prominent economists have been sharing their view that states can do more to help distressed homeowners, acknowledging that the biggest problem in doing so is state funding. To that regard, HUD earlier this year created the EHLP – the Emergency Homeowner’s Loan Program. It, along with other federal programs, provided $1 billion to states with programs geared toward helping homeowners. Many state programs have realized great success in this endeavor, and the problem facing these programs going forward will be the federal budget situation. If you are looking for a way to get help with a distressed home situation, now is a great time to find out if there are any state programs that can assist you.

If you are delinquent on your mortgage and have not discussed options with a counselor, a Realtor and your accountant or financial planner, it is imperative that you do so. There are options available to  you, but the longer you wait, the less of a chance that you may be able to reap the benefits of any of these options. The government is attempting to help you, and there are some programs available for free, such as HopeNow, the free counseling agency that can review your situation with you and make suggestions about available options. They can be reached at (888)995-HOPE.

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June Real Estate News

Monday, June 13th, 2011

Downpayment increase rule under debate: If you haven’t heard, banking industry regulators have a rule on the table that would require buyers to pay a minimum of 20% down on home purchases. Although many lenders require this already there are some loans that can be obtained with very little money down, such as FHA loans (which require only 3.5% down). This has stirred much debate amongst buyers, sellers, Realtors, economists and politicians, with studies concluding that 30% of the home sales market would be decimated.

Congress’ intention in raising downpayment rates is to provide stronger borrowers, thus preventing fewer loan defaults in the future. But many groups, including the National Association of Realtors (NAR) are vehemently opposed to such legislation and have been lobbying against the proposal. I will keep you updated.

Mortgage Servicers in the Hot Seat Again: At least 14 regulated mortgage servicers have been scolded by banking regulators for negligence and misconduct in servicing, or failing to properly service loans. The U.S. Treasury also recently released a report indicating performance by the 10 largest HAMP (Home Affordable Modification Program) servicers. They found 4 need substantial improvement (including Bank of America, Wells Fargo and JP Morgan Chase), and are withholding future financial incentives under the program to the 3 mentioned above until improvements are made and problems addressed.

Home Sales Expected to Rise This Year: Some economists, like Lawrence Yun – chief economist for the National Association of Realtors – predict sales for the remainder of the year will improve for the following reasons: more jobs, stock market wealth is on the rise, apartment rents are climbing, conditions of high affordability continue, home values are at historically low levels, investors are out in the market nice again looking to hedge against inflation, lenders starting to shorten lengthy short sale processes, and the number of foreign buyers has increased due to market conditions. Of course there are other factors to keep an eye on, like gas prices and the fate of Congress’ attempt to increase down payments on home purchases (see above), but there seem to be strong factors indicating this may in fact be true. Let’s hope so.

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Understanding Why You Didn’t Qualify for a Loan Mod

Friday, March 25th, 2011

Are you one of the countless homeowners who tried to obtain a loan modification under HAMP (the government’s Home Affordable Modification Program) but were denied? If so you may not have been given a reason, which makes all the time you spent, the hopes you harbored, the pages and pages of documentation you compiled, seem like a complete waste of time. Disclosure requirements have now changed for loan modification denials under HAMP, making it doubtful others will go through the same difficulties.

As of February 1 of this year lenders are required to send disclosure letters to some borrowers who applied for modifications under HAMP but were denied. Yes, I said “some,” so not everyone will receive such information (and I am not sure how this is determined). The letters must reveal up to 33 data points. These are points that the servicer uses to determine whether the borrower qualifies under HAMP, in order to satisfy the net present value (NPV) test. The goal is to make sure the new loan would be in the lender’s best interests so as to prevent future default.

If the borrower feels information used to deny the modification was incorrect, he may appeal the modification to the servicer within 30 days of receipt of the letter. Appeals must be in writing, supported by evidence explaining the perceived correct values. An example is if the home was valued incorrectly. If the borrower has a recent appraisal that changes the valuation she could present that as evidence in the appeal process.

The U.S. Treasury Department is currently creating a website where borrowers will be able to go to run their own HAMP tests to see if they meet the HAMP criteria for a modification. The site should be ready in late springtime. It may be of help to those who want to understand the 51 HAMP data points that are taken into consideration when applying for a modification under the program.

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