Showing posts with label president obama. Show all posts
Showing posts with label president obama. Show all posts
Thursday, March 8, 2012
Market Strengthening: Obama Administration Releases February Housing Scorecard | RISMedia
The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury today released the February edition of the Obama Administration’s Housing Scorecard—a comprehensive report on the nation’s housing market. Data continues to show signs that the housing market is strengthening, although the recovery remains fragile. The supply of new and existing homes on the market continued to decline last month. However, home prices dipped again as seasonal lows continued for the fourth month in a row. The continued fragility of the housing market underscores the need for recently-announced expansions of assistance to help prevent foreclosures and strengthen hard hit communities. The full Housing Scorecard is available online at www.hud.gov/scorecard.
“Since April 2009, more than 13 million homeowners have taken advantage of our refinance programs. Following enhancements to the Home Affordable Refinance Program, another 300,000 families have already started the process of refinancing and stand to save on average $2,500 per year—the equivalent of a good-sized tax cut. So the Administration’s efforts have produced significant positive benefits,” says HUD Assistant Secretary Raphael Bostic. “But 1 in 5 Americans still owes more than their home is worth. This lasting scar of the Great Recession driven by housing’s collapse is a clear sign that we are not yet out of the woods. That is why we are asking the Congress to approve the President’s housing proposals so that more homeowners can receive assistance.”
Included in this month’s Making Home Affordable Program Report are detailed assessments for the largest mortgage servicers participating in the program with results from the fourth quarter of 2011. The Servicer Assessments—first introduced in June 2011 and published quarterly—have set a benchmark for disclosure around servicer efforts to assist struggling homeowners.
“The Making Home Affordable Program has established critical standards that have changed the mortgage industry for the better, and the assessments have been a principal tool for measuring that progress,” says Treasury Assistant Secretary for Financial Stability Tim Massad. “By shining the spotlight on key practices, we have prompted servicers to improve their implementation of the Making Home Affordable Program. However, there is still more work to be done to ensure that the industry treats all borrowers properly. The implementation of the broader standards required by the settlement, together with our continued compliance efforts, will help bring this about.”
The standards established by the Making Home Affordable Program were also a guide for many of the servicing standards included in the historic $25 billion settlement recently announced between the federal government, 49 state Attorneys General and the five largest mortgage servicers regarding mortgage servicing and foreclosure deficiencies.
Since inception of the Making Home Affordable Program, Treasury has required participating servicers to take specific actions to improve their processes through ongoing program reviews. The latest Servicer Assessments summarize performance on metrics in three categories of program implementation: identifying and contacting homeowners; homeowner evaluation and assistance; and program reporting, management and governance. Results for the fourth quarter of 2011 show that servicers are focusing attention on areas identified in previous program reviews and, as a result, are demonstrating considerable improvement in program implementation:
• Mortgage servicers show continued improvement in calculating homeowner income, which is used to determine a homeowner’s eligibility and modified payment amount under the program.
• Servicers are more effectively evaluating homeowners under program eligibility criteria as performance in the “second look disagree” category, which reflects the rate at which Treasury’s program reviews disagree with the servicers’ decision not to assist a homeowner, remains consistently below the established benchmark.
As the Administration continues to push servicers to provide more effective assistance to struggling homeowners, the ongoing recovery of the housing market demonstrates the need for the Administration’s efforts. The February Housing Scorecard features key data on the health of the housing market and the impact of the Administration’s foreclosure prevention programs, including:
• Market data show progress on housing overhang and sales but continued fragility in home prices. The supply of homes on the market continued to decline last month. At the current rate, it would take 6.1 months to turn over the supply of existing homes currently on the market – and just 5.6 months to turn over the stock of new homes for sale – the lowest inventory of homes for sale since 2006. Existing home sales continued to improve this month, reaching their highest pace since May 2010. However, home prices dipped again in December, as measured by the Case-Shiller index, as seasonal lows continued for the fourth month.
• The Administration’s foreclosure programs are providing relief for millions of homeowners as we continue to recover from an unprecedented housing crisis. More than 5.7 million modification arrangements were started between April 2009 and the end of January 2012 – including nearly 1.8 million trial modification starts through the Home Affordable Modification Program (HAMP) and more than 1.2 million FHA loss mitigation and early delinquency interventions. The Administration’s programs continue to encourage improved standards and processes in the industry, with HOPE Now lenders offering families and individuals more than 2.7 million proprietary mortgage modifications through January.
• Homeowners entering HAMP demonstrate a high likelihood of long-term success in the program. As of January, more than 950,000 homeowners received a permanent HAMP modification, saving more than $530 on their mortgage payments each month. Eighty-five percent of homeowners entering the program in the last 19 months have received a permanent modification, with an average trial period of 3.5 months. Homeowners in HAMP permanent modifications have saved an estimated $11 billion to date. View the January Making Home Affordable Program Performance Report .
For more information, visit www.treasury.gov.
By RISMedia Mar 7, 2012
Market Strengthening: Obama Administration Releases February Housing Scorecard | RISMedia
Wednesday, March 7, 2012
UPDATE 4-Obama offers mortgage relief to millions of homeowners | Reuters
* Up-front fees and annual premiums to be cut for FHA refis
* White House says up to 3 million borrowers may be eligible
* Plan marks Obama's latest proposal to help housing market
WASHINGTON, March 6 (Reuters) - U.S. President Barack Obama announced on Tuesday a cut in fees on many government-backed mortgages that he said could help millions of homeowners refinance, part of an election-year push to boost the shaky U.S. housing market.
Under the plan, a typical borrower with a loan backed by the Federal Housing Administration could save a thousand dollars a year by refinancing into a new FHA loan, the White House said. The fee reductions would be on top of any savings from a lower interest rate.
Two million to three million borrowers would be eligible, although the White House said participation would more likely number in the "hundreds of thousands."
The step is the latest in a series by the Obama administration to aid a depressed U.S. housing market and homeowners threatened by a rising tide of foreclosures.
About 11.1 million Americans now owe more than their homes are worth.
"I'm not one of those people who believe that we just sit by and wait for the housing market to hit bottom," Obama said at a news conference. "There are real things we can do right now that would make a substantial difference in the lives of innocent, responsible homeowners."
Obama, who faces re-election in November, introduced the cut in mortgage fees alongside efforts to compensate members of the military who may have been wrongfully foreclosed.
The lower fees being put in place would be available to borrowers seeking a new loan through FHA's streamlined refinancing program, and even borrowers who owe more on their mortgage than their homes are worth would be eligible.
Under the streamlined program, borrowers must be current on their payments and income verifications, and appraisals are waived. The reduced fees announced today would be available to borrowers who are refinancing loans taken out before June 1, 2009.
BROAD BENEFITS FOR THE ECONOMY
Of the 5.4 million 30-year fixed-rate mortgages that the FHA backs, 3.2 million would not be eligible because they were issued after the June 1, 2009, cut-off date, according to Mahesh Swaminathan, an analyst at Credit Suisse Group AG.
The reduced fees, though, should help enough homeowners that there will be a positive ripple effect throughout the U.S. economy, according to Jaret Seiberg, senior policy analyst with Guggenheim Securities.
"This should be broadly positive for housing and the economy by reducing foreclosures and freeing up income for consumers to spend on other goods and services," Seiberg wrote in a note to Guggenheim clients.
The biggest banks, such as Wells Fargo & Co., Bank of America Corp and JPMorgan Chase & Co., are likely to see an increase in refinancing volume, which could mean higher income from fees related to FHA mortgages, he wrote.
While mortgage rates are at historic lows around 4 percent, many Americans lack the equity to refinance. Others are locked out by tight credit conditions.
Obama has announced several changes to the administration's housing policies this year to help borrowers, including an expansion of an existing mortgage relief program that had failed to reach as many homeowners as hoped.
The latest plan, which does not need congressional approval, reduces the cost of up-front FHA mortgage insurance premiums to 0.01 percent from 1 percent of a borrower's loan balance. It also cuts the annual fee for these loans in half to 0.55 percent.
Many FHA borrowers have found refinancing prohibitive in recent years because of increased insurance premiums. The administration has been raising fees for FHA loans to shore up the agency's dwindling capital and shrink its footprint in the market. The agency backs about a third of all new mortgages.
MILITARY PERSONNEL TO GET RELIEF
The White House also announced more details about an agreement with mortgage servicers to compensate people serving in the military and veterans who faced wrongful foreclosure.
It said servicers will reviews thousands of foreclosures on properties owned by members of the military and will pay those whose homes were wrongly seized the amount of lost equity plus interest and $116,785.
The administration is also seeking refunds for military personnel who were wrongfully denied refinancing.
by Margaret Chadbourn Reuters Mar 6, 2012
UPDATE 4-Obama offers mortgage relief to millions of homeowners | Reuters
* White House says up to 3 million borrowers may be eligible
* Plan marks Obama's latest proposal to help housing market
WASHINGTON, March 6 (Reuters) - U.S. President Barack Obama announced on Tuesday a cut in fees on many government-backed mortgages that he said could help millions of homeowners refinance, part of an election-year push to boost the shaky U.S. housing market.
Under the plan, a typical borrower with a loan backed by the Federal Housing Administration could save a thousand dollars a year by refinancing into a new FHA loan, the White House said. The fee reductions would be on top of any savings from a lower interest rate.
Two million to three million borrowers would be eligible, although the White House said participation would more likely number in the "hundreds of thousands."
The step is the latest in a series by the Obama administration to aid a depressed U.S. housing market and homeowners threatened by a rising tide of foreclosures.
About 11.1 million Americans now owe more than their homes are worth.
"I'm not one of those people who believe that we just sit by and wait for the housing market to hit bottom," Obama said at a news conference. "There are real things we can do right now that would make a substantial difference in the lives of innocent, responsible homeowners."
Obama, who faces re-election in November, introduced the cut in mortgage fees alongside efforts to compensate members of the military who may have been wrongfully foreclosed.
The lower fees being put in place would be available to borrowers seeking a new loan through FHA's streamlined refinancing program, and even borrowers who owe more on their mortgage than their homes are worth would be eligible.
Under the streamlined program, borrowers must be current on their payments and income verifications, and appraisals are waived. The reduced fees announced today would be available to borrowers who are refinancing loans taken out before June 1, 2009.
BROAD BENEFITS FOR THE ECONOMY
Of the 5.4 million 30-year fixed-rate mortgages that the FHA backs, 3.2 million would not be eligible because they were issued after the June 1, 2009, cut-off date, according to Mahesh Swaminathan, an analyst at Credit Suisse Group AG.
The reduced fees, though, should help enough homeowners that there will be a positive ripple effect throughout the U.S. economy, according to Jaret Seiberg, senior policy analyst with Guggenheim Securities.
"This should be broadly positive for housing and the economy by reducing foreclosures and freeing up income for consumers to spend on other goods and services," Seiberg wrote in a note to Guggenheim clients.
The biggest banks, such as Wells Fargo & Co., Bank of America Corp and JPMorgan Chase & Co., are likely to see an increase in refinancing volume, which could mean higher income from fees related to FHA mortgages, he wrote.
While mortgage rates are at historic lows around 4 percent, many Americans lack the equity to refinance. Others are locked out by tight credit conditions.
Obama has announced several changes to the administration's housing policies this year to help borrowers, including an expansion of an existing mortgage relief program that had failed to reach as many homeowners as hoped.
The latest plan, which does not need congressional approval, reduces the cost of up-front FHA mortgage insurance premiums to 0.01 percent from 1 percent of a borrower's loan balance. It also cuts the annual fee for these loans in half to 0.55 percent.
Many FHA borrowers have found refinancing prohibitive in recent years because of increased insurance premiums. The administration has been raising fees for FHA loans to shore up the agency's dwindling capital and shrink its footprint in the market. The agency backs about a third of all new mortgages.
MILITARY PERSONNEL TO GET RELIEF
The White House also announced more details about an agreement with mortgage servicers to compensate people serving in the military and veterans who faced wrongful foreclosure.
It said servicers will reviews thousands of foreclosures on properties owned by members of the military and will pay those whose homes were wrongly seized the amount of lost equity plus interest and $116,785.
The administration is also seeking refunds for military personnel who were wrongfully denied refinancing.
by Margaret Chadbourn Reuters Mar 6, 2012
UPDATE 4-Obama offers mortgage relief to millions of homeowners | Reuters
Thursday, February 2, 2012
Obama unveils plan on housing
President Barack Obama is proposing new legislation that would change the way houses are bought, sold and refinanced as an effort to stabilize the nation's ailing housing system.
One immediate goal of the so-called Homeowner Bill of Rights is to enable more borrowers to refinance, reduce their monthly payments or pay off their loans sooner, rebuilding equity lost in the housing crash.
The legislation announced Wednesday also would create a standardized system for mortgage applications and would expand bulk sales of government-owned foreclosure homes to investors, with the goal of decreasing the number of empty homes.
The bill would expand on a refinancing plan announced in October. That plan directed federal mortgage giants Fannie Mae and Freddie Mac to allow refinancing for mortgage-holders even if their homes are underwater by any amount. But the plan could not be offered to homeowners with mortgages privately held by banks. The new legislation would allow those homeowners to refinance as well, with the associated costs covered by a fee on major lenders.
Nearly 3.5 million U.S. homeowners with private mortgages, who owe more than their houses are now worth, could be eligible if the legislation passes.
However, the proposal is expected to meet strong opposition from Republicans. The program would cost between $5 billion and $10 billion.
"Millions of families who did the right and responsible thing, folks who shopped for a home that they could afford, secured a mortgage, made their payments each month -- they were hurt badly by the irresponsible actions of other people who weren't playing by the same rules," Obama said Wednesday.
"It is wrong for anybody to suggest that the only option for struggling, responsible homeowners is to sit and wait for the housing market to hit bottom," he said.
Political analysts see the new Obama plan as a direct response to Republican presidential candidate Mitt Romney's recent comments in Las Vegas.
Romney said the government shouldn't try to help homeowners by stopping foreclosures, instead suggesting letting the market hit bottom so investors buy the houses and rent them out until the housing turns around.
"This plan is a win-win for the president. He is clearly responding to the Romney statement that the best way to handle the housing crisis is ride it out," said Bruce Merrill, political-science analyst and pollster with the Phoenix-based Morrison Institute. "The battleground for the presidential race is the middle class, and there is clearly nothing more important to that group than homeownership."
Merrill said the housing issues shouldn't be a political one because helping homeowners is clearly what is good for the country.
House Speaker Republican John Boehner was critical of the plan Wednesday, saying none of the president's previous proposals to help the housing market has worked.
Many metro Phoenix homeowners have already started to apply for the refinancing program available for loans backed by Fannie and Freddie. Those refinanced loans are expected to be available in March. The program allows homeowners, no matter how underwater they are, to refinance to current low interest rates, as long as they haven't missed more than one payment in the past six months.
In the Phoenix area, where home values have plummeted 60 percent since the boom of 2006, almost half of all homeowners owe more than their homes are worth.
Details of Obama's proposed legislation include:
Allowing eligible, underwater homeowners with private mortgages to refinance.
Banks would potentially pay to finance part of the program.
Standardizing the loan application and borrowing process.
This is a move to cut down on mortgage fraud and protect borrowers from being overcharged or placed in risky loans they don't understand. The federal government's new consumer-protection group would oversee this process.
Allowing Fannie and Freddie to sell foreclosure homes in bulk.
The sales would run through a new auction process instead of happening one at a time. This would draw more big investors to buy the houses and turn them into rentals. The goal is for fewer foreclosure homes to sit vacant for long periods of time. However, such bulk purchases could drive down an area's home prices.
Separately, Obama said Wednesday that the Home Affordable Modification Program he announced in Mesa three years ago hasn't been nearly as successful as he hoped. That program encouraged lenders to modify loans, decreasing interest rates or extending the repayment terms to help struggling borrowers lower their payments.
But banks have made far fewer modifications than expected. So, the president said, the loan-modification program is being extended by a year -- it will expire at the end of 2013 -- and expanded to help more borrowers who didn't meet the income requirements before.
But most importantly, Fannie and Freddie will be given more incentives to begin reducing the principal on loans they own through loan modifications.
Fannie and Freddie have had a policy of not allowing principal reductions.
"I have no idea whether the legislation has a chance to pass," said Mike Orr, director of the Center for Real Estate Theory and Practice at Arizona State University's W.P. Carey School and publisher of the Cromford Report.
"However, I would say that helping underwater homeowners, who are still current on their payments, refinance into lower interest-rate loans is the best thing the government could do for the market."
by Catherine Reagor - Feb. 1, 2012 11:20 PM The Republic | azcentral.com
Obama unveils plan on housing
One immediate goal of the so-called Homeowner Bill of Rights is to enable more borrowers to refinance, reduce their monthly payments or pay off their loans sooner, rebuilding equity lost in the housing crash.
The legislation announced Wednesday also would create a standardized system for mortgage applications and would expand bulk sales of government-owned foreclosure homes to investors, with the goal of decreasing the number of empty homes.
The bill would expand on a refinancing plan announced in October. That plan directed federal mortgage giants Fannie Mae and Freddie Mac to allow refinancing for mortgage-holders even if their homes are underwater by any amount. But the plan could not be offered to homeowners with mortgages privately held by banks. The new legislation would allow those homeowners to refinance as well, with the associated costs covered by a fee on major lenders.
Nearly 3.5 million U.S. homeowners with private mortgages, who owe more than their houses are now worth, could be eligible if the legislation passes.
However, the proposal is expected to meet strong opposition from Republicans. The program would cost between $5 billion and $10 billion.
"Millions of families who did the right and responsible thing, folks who shopped for a home that they could afford, secured a mortgage, made their payments each month -- they were hurt badly by the irresponsible actions of other people who weren't playing by the same rules," Obama said Wednesday.
"It is wrong for anybody to suggest that the only option for struggling, responsible homeowners is to sit and wait for the housing market to hit bottom," he said.
Political analysts see the new Obama plan as a direct response to Republican presidential candidate Mitt Romney's recent comments in Las Vegas.
Romney said the government shouldn't try to help homeowners by stopping foreclosures, instead suggesting letting the market hit bottom so investors buy the houses and rent them out until the housing turns around.
"This plan is a win-win for the president. He is clearly responding to the Romney statement that the best way to handle the housing crisis is ride it out," said Bruce Merrill, political-science analyst and pollster with the Phoenix-based Morrison Institute. "The battleground for the presidential race is the middle class, and there is clearly nothing more important to that group than homeownership."
Merrill said the housing issues shouldn't be a political one because helping homeowners is clearly what is good for the country.
House Speaker Republican John Boehner was critical of the plan Wednesday, saying none of the president's previous proposals to help the housing market has worked.
Many metro Phoenix homeowners have already started to apply for the refinancing program available for loans backed by Fannie and Freddie. Those refinanced loans are expected to be available in March. The program allows homeowners, no matter how underwater they are, to refinance to current low interest rates, as long as they haven't missed more than one payment in the past six months.
In the Phoenix area, where home values have plummeted 60 percent since the boom of 2006, almost half of all homeowners owe more than their homes are worth.
Details of Obama's proposed legislation include:
Allowing eligible, underwater homeowners with private mortgages to refinance.
Banks would potentially pay to finance part of the program.
Standardizing the loan application and borrowing process.
This is a move to cut down on mortgage fraud and protect borrowers from being overcharged or placed in risky loans they don't understand. The federal government's new consumer-protection group would oversee this process.
Allowing Fannie and Freddie to sell foreclosure homes in bulk.
The sales would run through a new auction process instead of happening one at a time. This would draw more big investors to buy the houses and turn them into rentals. The goal is for fewer foreclosure homes to sit vacant for long periods of time. However, such bulk purchases could drive down an area's home prices.
Separately, Obama said Wednesday that the Home Affordable Modification Program he announced in Mesa three years ago hasn't been nearly as successful as he hoped. That program encouraged lenders to modify loans, decreasing interest rates or extending the repayment terms to help struggling borrowers lower their payments.
But banks have made far fewer modifications than expected. So, the president said, the loan-modification program is being extended by a year -- it will expire at the end of 2013 -- and expanded to help more borrowers who didn't meet the income requirements before.
But most importantly, Fannie and Freddie will be given more incentives to begin reducing the principal on loans they own through loan modifications.
Fannie and Freddie have had a policy of not allowing principal reductions.
"I have no idea whether the legislation has a chance to pass," said Mike Orr, director of the Center for Real Estate Theory and Practice at Arizona State University's W.P. Carey School and publisher of the Cromford Report.
"However, I would say that helping underwater homeowners, who are still current on their payments, refinance into lower interest-rate loans is the best thing the government could do for the market."
by Catherine Reagor - Feb. 1, 2012 11:20 PM The Republic | azcentral.com
Obama unveils plan on housing
Government Triples Payout to Servicers for Principal Reduction Under Revamp of HAMP | Mortgage News | Daily National and State Headlines
The Making Home Affordable Program deadline will be extended for an additional year, through Dec. 31, 2013. This date conforms to the extended deadline for HARP. The U.S. Department of the Treasury will also triple the incentives provided to investors who agree to reduce principal for borrowers by paying from .18 to .63 cents on the dollar, depending on the degree of change in the loan-to-value (LTV) ratio.
HAMP borrowers who have loans owned or guaranteed by the government-sponsored enterprises (GSEs)—Fannie Mae or Freddie Mac—do not currently benefit from principal reduction loan modifications. To encourage the GSEs to offer this assistance to underwater borrowers, Treasury has notified the GSEs’ regulator, the Federal Housing Finance Agency (FHFA), that it will pay principal reduction incentives to both Fannie Mae or Freddie Mac if they allow servicers to forgive principal in conjunction with a HAMP modification.
"Fannie Mae and Freddie Mac currently have 470,000 permanent HAMP modifications on their books, but also have active another 530,000 non-HAMP modifications since 2009, or roughly one million total," said FHFA Acting Director Edward J. DeMarco. "The GSEs have also completed one million nonmodification foreclosure prevention actions, ranging from forbearance plans to short sales, for
a total of some two million actions that have helped homeowners in trouble avoid foreclosure and,
in most cases, keep their home."
In response to the announcement of the HAMP expansion, FHFA has announced the following with regards to the GSEs:
►Both Fannie Mae and Freddie Mac will extend their use of HAMP Tier 1 as the first modification option through 2013 in line with the Treasury’s HAMP extension.
►Fannie Mae and Freddie Mac will continue in their respective roles as financial agents for Treasury in implementing the changes announced.
►The HAMP Tier 2 option is based on the GSEs’ standard modification that FHFA announced and the enterprises implemented last year under the Servicing Alignment Initiative, meaning Fannie Mae and Freddie Mac will not need to adopt further changes to be in alignment with HAMP Tier 2.
►FHFA has been asked to consider the newly available HAMP incentives for principal reduction. FHFA recently released analysis concluding that principal forgiveness did not provide benefits that were greater than principal forbearance as a loss mitigation tool.
“HOPE NOW is pleased that the Obama Administration has reviewed its existing HAMP program and decided that expanding it to reach more homeowners and extending it for another year is the appropriate course of action," said Faith Schwartz, executive director of HOPE NOW, a voluntary, private sector alliance of mortgage servicers, investors, mortgage insurers and non-profit counselors. "We have worked very closely with Making Home Affordable since its inception. HAMP has not only helped nearly a million distressed homeowners nationwide, it has established a standardized process for allowing mortgage servicers to determine the proper solution for each individual case, whether it be a HAMP modification, proprietary modification or short term solution."
HAMP has helped more than 900,000 U.S. homeowners permanently modify their mortgage loans, resulting in a median savings of more than $500 every month in most cases. Since December of 2009, 80 percent of proprietary modifications have included reduced principal and interest payments and 60 percent of proprietary modifications have had those payments reduced by 10 percent or more.
"This initiative shows that President Obama’s strong language on the foreclosure crisis and holding bankers accountable during his State of the Union speech is more than mere rhetoric," said Richard L. Trumka, president of the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO). "The expansion of principal reduction alternatives to foreclosure complements the President’s new working group of state and federal officials who are investigating bank wrongdoing in mortgage-backed securities. Homeowners who have been harmed by fraudulent bank practices must receive real relief in the form of meaningful principal reduction on their mortgages."
by nationalmortgageprofessional.com Jan 27, 2012
Government Triples Payout to Servicers for Principal Reduction Under Revamp of HAMP | Mortgage News | Daily National and State Headlines
Sunday, November 27, 2011
Details of refinancing eligibility trickling in
Many Arizona homeowners underwater with their mortgages are anxiously awaiting more information on how they can lower their interest rates and payments through the expansion of the government's Housing Affordable Refinance Program.
But details on the program have been delayed. Information on which homeowners are eligible and how to apply was supposed to be released by now but will likely come out next week. However, government mortgage giants Fannie Mae and Freddie Mac have begun providing lenders information on how to handle the expansion of HARP. Only homeowners with loans held by those entities are eligible to refinance, no matter how much more they owe on their home than its actually worth.
From the new information sent to lenders, it's now clear not all borrowers with Fannie Mae and Freddie Mac mortgages are eligible. A loan-to-value ratio of 105 percent is still in effect for borrowers with mortgages that have longer terms than 30 years or adjustable-rate mortgages with terms of five years or higher.
While some borrowers can start applying to refinance as soon as Dec. 1., others with loan-to-value ratios above 125 percent will have to wait until at least February of next year.
Some questions and answers:
Q: Phoenix-area homeowner Marla Griggs knows she's not eligible for the refinancing program but is coming up on the end of the five-year point of her option-adjustable mortgage. The loan is not owned by Fannie Mae or Freddie Mac, and she wants to know her options for keeping her home by refinancing and lowering her payment.
"Many people are not eligible for this program. Why can't it be applied to all mortgages?" she asks.
A: The federal government hasn't been able to make privately owned lenders readily participate in its programs, including loan modifications, to help homeowners avoid foreclosure. When U.S. Department of Housing and Urban Development Secretary Shaun Donovan talked to The Arizona Republic a few weeks ago, he was well-aware that the refinancing program wouldn't help everyone. He said the government has to do what it can do to help the most homeowners now, and then hope the plans will catch on with lenders.
Jay Luber of Phoenix-based Galaxy Lending said early instructions from Fannie and Freddie show it won't be until March when the refinancing programs to help many metro Phoenix borrowers will likely be available.
Sorry, Marla, that doesn't help you. But housing advocates say to call Arizona's foreclosure hotline at 877-448-1211.
Q: Bruce Robinson asks, "What about all of us poor souls out here with FHA (insured) mortgages? We represent a huge portion of the outstanding mortgage market, and yet I read nothing indicating that the administration is doing anything for us.
"FHA's existing 'Streamline' refinance program is nothing more than a hollow promise. First, the fees are incredible, with FHA requiring a whole new up-front guarantee fee. Then, FHA is charging monthly 'mortgage insurance,' which is more than double that which is charged on most existing loans. Many mainstream national mortgage lenders appear to be simply avoiding 'Streamline' since it is so disadvantageous to most FHA borrowers."
A: I am hearing the same issues from many FHA borrowers. But mortgage brokers are beginning to report more success with the streamlines, partially due to more government focus on the program. The big issue is you have to stay in your home several years after the streamline for the additional fees to make sense. Donovan mentioned that some changes could be made to the FHA program, as well. I will write about those as soon as information is available.
by Catherine Reagor The Arizona Republic Nov. 26, 2011 12:00 AM
Details of refinancing eligibility trickling in
But details on the program have been delayed. Information on which homeowners are eligible and how to apply was supposed to be released by now but will likely come out next week. However, government mortgage giants Fannie Mae and Freddie Mac have begun providing lenders information on how to handle the expansion of HARP. Only homeowners with loans held by those entities are eligible to refinance, no matter how much more they owe on their home than its actually worth.
From the new information sent to lenders, it's now clear not all borrowers with Fannie Mae and Freddie Mac mortgages are eligible. A loan-to-value ratio of 105 percent is still in effect for borrowers with mortgages that have longer terms than 30 years or adjustable-rate mortgages with terms of five years or higher.
While some borrowers can start applying to refinance as soon as Dec. 1., others with loan-to-value ratios above 125 percent will have to wait until at least February of next year.
Some questions and answers:
Q: Phoenix-area homeowner Marla Griggs knows she's not eligible for the refinancing program but is coming up on the end of the five-year point of her option-adjustable mortgage. The loan is not owned by Fannie Mae or Freddie Mac, and she wants to know her options for keeping her home by refinancing and lowering her payment.
"Many people are not eligible for this program. Why can't it be applied to all mortgages?" she asks.
A: The federal government hasn't been able to make privately owned lenders readily participate in its programs, including loan modifications, to help homeowners avoid foreclosure. When U.S. Department of Housing and Urban Development Secretary Shaun Donovan talked to The Arizona Republic a few weeks ago, he was well-aware that the refinancing program wouldn't help everyone. He said the government has to do what it can do to help the most homeowners now, and then hope the plans will catch on with lenders.
Jay Luber of Phoenix-based Galaxy Lending said early instructions from Fannie and Freddie show it won't be until March when the refinancing programs to help many metro Phoenix borrowers will likely be available.
Sorry, Marla, that doesn't help you. But housing advocates say to call Arizona's foreclosure hotline at 877-448-1211.
Q: Bruce Robinson asks, "What about all of us poor souls out here with FHA (insured) mortgages? We represent a huge portion of the outstanding mortgage market, and yet I read nothing indicating that the administration is doing anything for us.
"FHA's existing 'Streamline' refinance program is nothing more than a hollow promise. First, the fees are incredible, with FHA requiring a whole new up-front guarantee fee. Then, FHA is charging monthly 'mortgage insurance,' which is more than double that which is charged on most existing loans. Many mainstream national mortgage lenders appear to be simply avoiding 'Streamline' since it is so disadvantageous to most FHA borrowers."
A: I am hearing the same issues from many FHA borrowers. But mortgage brokers are beginning to report more success with the streamlines, partially due to more government focus on the program. The big issue is you have to stay in your home several years after the streamline for the additional fees to make sense. Donovan mentioned that some changes could be made to the FHA program, as well. I will write about those as soon as information is available.
by Catherine Reagor The Arizona Republic Nov. 26, 2011 12:00 AM
Details of refinancing eligibility trickling in
Project Rebuild holds promise for housing industry
Almost hidden near the bottom of the American Jobs Act, the Obama administration proposed a plan to help the areas hit hardest by foreclosures and the loss of construction jobs.
Known as Project Rebuild, the program would have accounted for a small portion of the $450 billion jobs bill -- about $15 billion. The money would go toward putting local construction workers back to work and revitalizing vacant and foreclosure homes.
This isn't a vital need for every state, but it is in Arizona where nearly 250,000 construction workers have lost their jobs since the housing crash.
U.S. Secretary of Housing and Urban Development Shaun Donovan was in Phoenix a little more than a week ago talking to housing and government leaders and touring neighborhoods that had received Neighborhood Stabilization Program, or NSP, funds. He also took some time to talk to The Arizona Republic.
The focus of most of our questions to Donovan was the expansion of the federal refinancing program to let homeowners lower their payments no matter how underwater they are with their mortgages.
More details and information on how homeowners apply to refinance are expected next week.
Project Rebuild was almost lost in the conversation because the Senate has already voted down the Jobs Act.
But the Obama administration is trying to break the plan into pieces it can enact through executive orders or existing funding.
It's obvious the administration isn't giving up on Project Rebuild, which would complement NSP, a plan enacted by the Bush administration before the last presidential election.
Project Rebuild would call for Arizona to receive almost half a billion dollars to renovate homes and revitalize neighborhoods.
Rep. Ed Pastor, D-Ariz., pointed out that only local contracting companies could apply for the funds.
Donovan said Arizona's share of the Project Rebuild funding could create as many as 6,100 jobs and rehabilitate as many as 5,800 properties.
The program won't spur a recovery of metro Phoenix's housing market. But coupled with the hundreds of millions of dollars in NSP funds that Arizona has received during the past few years to buy, sell and rehabilitate foreclosure homes and neighborhoods with too many abandoned homes, the money could certainly help.
Arizona Republic reporter Maria Polletta toured a south Phoenix neighborhood that received NSP funds with Donovan, Pastor and local government and non-profit leaders.
Edmundo Hidalgo, president of Chicanos Por La Causa, pointed out a home in the area that had appreciated by 50 percent since his group put a homeowner in it using NSP funds.
Some Arizona communities have been criticized for enacting their NSP programs too slowly.
But Hidalgo said his group has been selling 20 to 40 homes a month using funds from the government program.
Pastor said Project Rebuild is the right program to complement NSP and help Arizona's construction industry. But first the Obama administration must find a way to fund it.
by Catherine Reagor The Arizona Republic Nov. 19, 2011 12:00 AM
Project Rebuild holds promise for housing industry
Known as Project Rebuild, the program would have accounted for a small portion of the $450 billion jobs bill -- about $15 billion. The money would go toward putting local construction workers back to work and revitalizing vacant and foreclosure homes.
This isn't a vital need for every state, but it is in Arizona where nearly 250,000 construction workers have lost their jobs since the housing crash.
U.S. Secretary of Housing and Urban Development Shaun Donovan was in Phoenix a little more than a week ago talking to housing and government leaders and touring neighborhoods that had received Neighborhood Stabilization Program, or NSP, funds. He also took some time to talk to The Arizona Republic.
The focus of most of our questions to Donovan was the expansion of the federal refinancing program to let homeowners lower their payments no matter how underwater they are with their mortgages.
More details and information on how homeowners apply to refinance are expected next week.
Project Rebuild was almost lost in the conversation because the Senate has already voted down the Jobs Act.
But the Obama administration is trying to break the plan into pieces it can enact through executive orders or existing funding.
It's obvious the administration isn't giving up on Project Rebuild, which would complement NSP, a plan enacted by the Bush administration before the last presidential election.
Project Rebuild would call for Arizona to receive almost half a billion dollars to renovate homes and revitalize neighborhoods.
Rep. Ed Pastor, D-Ariz., pointed out that only local contracting companies could apply for the funds.
Donovan said Arizona's share of the Project Rebuild funding could create as many as 6,100 jobs and rehabilitate as many as 5,800 properties.
The program won't spur a recovery of metro Phoenix's housing market. But coupled with the hundreds of millions of dollars in NSP funds that Arizona has received during the past few years to buy, sell and rehabilitate foreclosure homes and neighborhoods with too many abandoned homes, the money could certainly help.
Arizona Republic reporter Maria Polletta toured a south Phoenix neighborhood that received NSP funds with Donovan, Pastor and local government and non-profit leaders.
Edmundo Hidalgo, president of Chicanos Por La Causa, pointed out a home in the area that had appreciated by 50 percent since his group put a homeowner in it using NSP funds.
Some Arizona communities have been criticized for enacting their NSP programs too slowly.
But Hidalgo said his group has been selling 20 to 40 homes a month using funds from the government program.
Pastor said Project Rebuild is the right program to complement NSP and help Arizona's construction industry. But first the Obama administration must find a way to fund it.
by Catherine Reagor The Arizona Republic Nov. 19, 2011 12:00 AM
Project Rebuild holds promise for housing industry
Sunday, November 13, 2011
More Arizonans can refinance for underwater mortgages under new plan
Many homeowners will be able to find out next week how to seek refinancing, no matter how underwater they are on their mortgages.
A federal mortgage program announced by President Barack Obama three weeks ago will smooth the refinancing process and overcome hurdles that so far have blocked many in Arizona and elsewhere from lowering their interest rates and mortgage payments.
In an interview with The Arizona Republic on Thursday, Department of Housing and Urban Development Secretary Shaun Donovan said full details of the program will be released Tuesday.
Donovan said officials are working to cut fees associated with refinancing by half or more and creating much less stringent requirements for qualifying, including eliminating credit checks.
The program's main intent is to assist homeowners who want to refinance to current mortgage rates. On a $250,000 mortgage, a switch from a 6 percent rate to the current rate of about 4 percent would cut the monthly payment by $300.
But many metro Phoenix homeowners have been unable to refinance because of plunging home values. In a typical deal, a bank would not issue a new loan unless the home's current value was enough to cover at least the amount of the loan. Since 2009, a federal program has allowed some homeowners to refinance for as much as 125 percent of their home's value.
But in metro Phoenix, where values have dropped more than 60 percent since 2007, many homeowners still couldn't qualify.
Estimates show nearly half of Arizona's mortgage holders are underwater.
The new program, as laid out by the president, would be open only to homeowners who are current on their payments or have missed no more than one in the past year.
It applies only to those with mortgages backed by government-owned mortgage giants Fannie Mae and Freddie Mac, but the two entities back more than half of all mortgages, meaning many homeowners are likely eligible.
Refinancing to lower payments could prevent more homeowners underwater on their mortgages from walking away and adding to the foreclosure crisis.
"We continue to work on the foreclosures problem, but we want to make sure to help those people paying their mortgages, even when they owe so much more than their is home is valued at," Donovan said.
Donovan was in Phoenix, just two days after Treasury Secretary Timothy Geithner visited the region, to talk to government and housing leaders about programs within Obama's American Jobs Act, which was voted down in the Senate.
The HUD secretary spent part of the morning touring a south Phoenix neigborhood that received federal Neighborhood Stabilization funds. Donovan was promoting Project Rebuild, which was part of the job bill.
He said Project Rebuild could create thousands of jobs and rehab almost 9,000 homes statewide.
U.S. Rep. Ed Pastor, D-Phoenix, said neighborhood assistance is key in the area.
"When you have foreclosures, what happens is it not only hurts families, but it has an effect on the neighborhood, on the schools, on the businesses around it," Pastor said.
After the tour, Phoenix Mayor Phil Gordon noted the region needs as much as anywhere in mitigating the effects of the housing crash.
"Phoenix got hit as hard or harder than anyone," he said.
The refinancing plan is an expansion of the Home Affordable Refinancing Program, which previously allowed refinancing up to only 125 percent of a home's value.
On Thursday, Donovan laid out five hurdles the government had to overcome to expand HARP.
1. Find a market for mortgages with loan-to-value ratios above 125 percent, the old limit on the program.
Currently, most loans are bundled together as securities and resold to investors, who make money off homeowners' interest payments.
But the market doesn't currently deal with loans that are underwater from the beginning. Donovan said the federal government will either create new securities to sell to investors or add a portfolio to hold the loans in.
2. Cut the cost of refinancing.
Donovan said federal officials will approve automated appraisals so they don't cost homeowners. They also are negotiating with title firms to cut their fees by at least half.
3. Prevent second mortgages from stalling the process.
Currently, banks that issue second mortgages can object to a refinancing deal on the original loan. Donovan said many second-lien holders have held up refinancings by trying to gain some leverage or cash in the deal.
Federal officials negotiated with lenders, Donovan said, persuading the top five U.S. lenders, which hold 60 percent of the nation's second mortgages, to allow the deals on first loans so the refinancing program will work.
"In some cases, lenders agreed purely out of self-interest," he said. "If borrowers have smaller payments on their first mortgage, they have more funds to pay their second mortgages."
4. Reduce the risk for lenders.
Fannie Mae and Freddie Mac help lenders issue more mortgages by buying up those mortgages after they are written. But recently, the mortgage giants have attempted to force banks to buy back problematic loans. Under the new program, Fannie Mae and Freddie Mac will agree not to force such buybacks except in cases of fraud. This will also make the refinancing program more competitive. Lenders can seek new business through refinancing without taking on a new liability.
5. Reduce the risk for mortgage insurers.
The program will allow for mortgage insurers to transfer a policy from the borrower's old loan to the newly refinanced loan easily and with little or no fee.
The final guidelines for the program will be out next week, which will tell homeowners how to apply.
While much government mortgage aid has intentionally tried to exclude investors and landlords, the new program also will be open, in some cases, to people who have a mortgage but don't live in the home.
People who now rent out their homes because they couldn't afford the payments or had to move for a job will also be eligible, Donovan said.
Still, he made it clear that investors, who bought homes solely to use them for rental or investment income, won't qualify.
Homeowners can check to see if their loan is backed by Fannie Mae or Freddie Mac by going to www.makinghomeaffordable.gov.
The program is available to borrowers with loans backed by Fannie Mae or Freddie Mac in 2009 or earlier.
Borrowers don't have to refinance through their original lender and could likely get offers from others.
Donovan made clear it doesn't matter if a homeowner is 100 percent underwater or 200 percent underwater because Fannie and Freddie are already carrying that risk on their books. He said what is important is that the borrower has been paying and deserves to be rewarded for it.
Full credit checks won't be run on eligible borrowers because they have been making their payments, another move that will save costs. In some cases, lenders might call a borrower's employer to see if he or she still has a job, he said.
"We want this program to spread beyond Fannie and Freddie loans," he said "Now, we are talking to lenders about refinancing underwater borrowers on loans the federal government isn't involved in."
by Catherine Reagor and Maria Polletta The Arizona Republic Nov. 11, 2011 12:00 AM
More Arizonans can refinance for underwater mortgages under new plan
A federal mortgage program announced by President Barack Obama three weeks ago will smooth the refinancing process and overcome hurdles that so far have blocked many in Arizona and elsewhere from lowering their interest rates and mortgage payments.
In an interview with The Arizona Republic on Thursday, Department of Housing and Urban Development Secretary Shaun Donovan said full details of the program will be released Tuesday.
Donovan said officials are working to cut fees associated with refinancing by half or more and creating much less stringent requirements for qualifying, including eliminating credit checks.
The program's main intent is to assist homeowners who want to refinance to current mortgage rates. On a $250,000 mortgage, a switch from a 6 percent rate to the current rate of about 4 percent would cut the monthly payment by $300.
But many metro Phoenix homeowners have been unable to refinance because of plunging home values. In a typical deal, a bank would not issue a new loan unless the home's current value was enough to cover at least the amount of the loan. Since 2009, a federal program has allowed some homeowners to refinance for as much as 125 percent of their home's value.
But in metro Phoenix, where values have dropped more than 60 percent since 2007, many homeowners still couldn't qualify.
Estimates show nearly half of Arizona's mortgage holders are underwater.
The new program, as laid out by the president, would be open only to homeowners who are current on their payments or have missed no more than one in the past year.
It applies only to those with mortgages backed by government-owned mortgage giants Fannie Mae and Freddie Mac, but the two entities back more than half of all mortgages, meaning many homeowners are likely eligible.
Refinancing to lower payments could prevent more homeowners underwater on their mortgages from walking away and adding to the foreclosure crisis.
"We continue to work on the foreclosures problem, but we want to make sure to help those people paying their mortgages, even when they owe so much more than their is home is valued at," Donovan said.
Donovan was in Phoenix, just two days after Treasury Secretary Timothy Geithner visited the region, to talk to government and housing leaders about programs within Obama's American Jobs Act, which was voted down in the Senate.
The HUD secretary spent part of the morning touring a south Phoenix neigborhood that received federal Neighborhood Stabilization funds. Donovan was promoting Project Rebuild, which was part of the job bill.
He said Project Rebuild could create thousands of jobs and rehab almost 9,000 homes statewide.
U.S. Rep. Ed Pastor, D-Phoenix, said neighborhood assistance is key in the area.
"When you have foreclosures, what happens is it not only hurts families, but it has an effect on the neighborhood, on the schools, on the businesses around it," Pastor said.
After the tour, Phoenix Mayor Phil Gordon noted the region needs as much as anywhere in mitigating the effects of the housing crash.
"Phoenix got hit as hard or harder than anyone," he said.
The refinancing plan is an expansion of the Home Affordable Refinancing Program, which previously allowed refinancing up to only 125 percent of a home's value.
On Thursday, Donovan laid out five hurdles the government had to overcome to expand HARP.
1. Find a market for mortgages with loan-to-value ratios above 125 percent, the old limit on the program.
Currently, most loans are bundled together as securities and resold to investors, who make money off homeowners' interest payments.
But the market doesn't currently deal with loans that are underwater from the beginning. Donovan said the federal government will either create new securities to sell to investors or add a portfolio to hold the loans in.
2. Cut the cost of refinancing.
Donovan said federal officials will approve automated appraisals so they don't cost homeowners. They also are negotiating with title firms to cut their fees by at least half.
3. Prevent second mortgages from stalling the process.
Currently, banks that issue second mortgages can object to a refinancing deal on the original loan. Donovan said many second-lien holders have held up refinancings by trying to gain some leverage or cash in the deal.
Federal officials negotiated with lenders, Donovan said, persuading the top five U.S. lenders, which hold 60 percent of the nation's second mortgages, to allow the deals on first loans so the refinancing program will work.
"In some cases, lenders agreed purely out of self-interest," he said. "If borrowers have smaller payments on their first mortgage, they have more funds to pay their second mortgages."
4. Reduce the risk for lenders.
Fannie Mae and Freddie Mac help lenders issue more mortgages by buying up those mortgages after they are written. But recently, the mortgage giants have attempted to force banks to buy back problematic loans. Under the new program, Fannie Mae and Freddie Mac will agree not to force such buybacks except in cases of fraud. This will also make the refinancing program more competitive. Lenders can seek new business through refinancing without taking on a new liability.
5. Reduce the risk for mortgage insurers.
The program will allow for mortgage insurers to transfer a policy from the borrower's old loan to the newly refinanced loan easily and with little or no fee.
The final guidelines for the program will be out next week, which will tell homeowners how to apply.
While much government mortgage aid has intentionally tried to exclude investors and landlords, the new program also will be open, in some cases, to people who have a mortgage but don't live in the home.
People who now rent out their homes because they couldn't afford the payments or had to move for a job will also be eligible, Donovan said.
Still, he made it clear that investors, who bought homes solely to use them for rental or investment income, won't qualify.
Homeowners can check to see if their loan is backed by Fannie Mae or Freddie Mac by going to www.makinghomeaffordable.gov.
The program is available to borrowers with loans backed by Fannie Mae or Freddie Mac in 2009 or earlier.
Borrowers don't have to refinance through their original lender and could likely get offers from others.
Donovan made clear it doesn't matter if a homeowner is 100 percent underwater or 200 percent underwater because Fannie and Freddie are already carrying that risk on their books. He said what is important is that the borrower has been paying and deserves to be rewarded for it.
Full credit checks won't be run on eligible borrowers because they have been making their payments, another move that will save costs. In some cases, lenders might call a borrower's employer to see if he or she still has a job, he said.
"We want this program to spread beyond Fannie and Freddie loans," he said "Now, we are talking to lenders about refinancing underwater borrowers on loans the federal government isn't involved in."
by Catherine Reagor and Maria Polletta The Arizona Republic Nov. 11, 2011 12:00 AM
More Arizonans can refinance for underwater mortgages under new plan
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