HUD APPROVES IDAHO’S $13 MILLION EMERGENCY HOME LOAN PROGRAM

April 4, 2011 By Leave a Comment

FOR RELEASE: Friday April 1, 2011
HUD No. 11-045

HUD APPROVES IDAHO’S $13 MILLION EMERGENCY HOME LOAN PROGRAM

Idaho Housing & Finance Association is ready to take applications immediately

WASHINGTON – U.S. Department of Housing and Urban Development HUD Secretary Shaun Donovan today approved the State of Idaho’s bid to administer HUD’s Emergency Homeowner Loan Program EHLP, a bridge loan program designed to help unemployed families pay their mortgages. HUD determined Idaho’s Housing and Finance Association’s mortgage bridge loan program is “substantially similar” to HUD’s program, thereby allowing the State to begin implementing the program itself.

Late last year, HUD awarded $1 billion to 32 states and Puerto Rico, including $13 million to the State of Idaho, to provide emergency assistance to homeowners at risk of foreclosure due to a substantial reduction in income brought on by layoff, underemployment, or a medical condition. With today’s approval, the Idaho Housing and Finance Association will begin taking applications. Interested homeowners should contact the Association’s housing counseling department at 877 888-3135 for further information.

“The Emergency Homeowner Loan Program will provide limited and targeted assistance to help working families get back on their feet and keep their home while they look for work,” said Secretary Donovan. “We are pleased to get the program off the ground in Idaho, which is already working to help keep families in their homes during difficult economic times.”

EHLP was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The law authorized HUD’s Secretary to allow funds to be administered by states that have an existing program that provides substantially similar assistance to homeowners. HUD found Idaho is administering an equivalent program and the grant funds may be used for reasonable administrative costs and to provide EHLP loans to homeowners in the state.

HUD’s Emergency Home Loan Program will work through a variety of state and non-profit entities and will offer a declining balance, deferred payment “bridge loan” zero percent interest, non-recourse, subordinate loan for up to $50,000 to assist eligible borrowers with payments on their mortgage principal, interest, mortgage insurance, taxes and hazard insurance for up to 24 months.

Under the program, eligible borrowers must:

[dropcap1]1[/dropcap1]Be at least three months delinquent in their payments and have a reasonable likelihood of being able to resume repayment of their mortgage payments and related housing expenses within two years;

[dropcap1]2[/dropcap1]Have a mortgage property that is the principal residence of the borrower, and eligible borrowers may not own a second home; and

[dropcap1]3[/dropcap1]Demonstrate a good payment record prior to the event that produced the reduction of income.

HUD determined that 27 states will use the delegated approach to program administration. Under this approach, HUD will delegate key program administration functions to an experienced and highly regarded national network of affiliated housing counseling agencies. Under the program, nonprofit housing counselors who are part of the National Foreclosure Mitigation Counseling Program administered by NeighborWorks® America will coordinate intake counseling, document preparation and outreach functions. HUD will also use it delegation authority to contract with an experienced entity to provide loan servicing and fiscal control functions such as collecting payments from homeowners, distributing payments to servicers, and managing loan balances.

HUD will announce additional details and program specifics for the delegated approach states when NeighborWorks® America launches the program in the coming weeks.

via HUD Press Release No.2011-04-01.

Filed Under: Credit Related, Financing, Foreclosure, Mortgage and Loans, Recent Changes, Selling, Short Sales Tagged With: , , , , , ,

The Rules: Initiative Gives Homebuyers 15 Days to Buy Without Investor Competition

March 12, 2011 By

Fannie Mae, Freddie Mac and HUD all have programs designed to give individuals looking to buy a home as an owner-occupant a chance to purchase prior to allowing real estate investors to buy these REO properties. All programs are similar with links at the bottom of this page too the specifics of the various programs.

Here are the guidelines for the “Freddie Mac First Look” program

Initiative

Freddie Mac will offer homebuyers and select non-profits an exclusive opportunity to purchase HomeSteps homes prior to competition from investors through the Freddie Mac First Look Initiative.

[pullquote_right]The Fannie Mae First Look program is pretty much the same as it is designed to promote owner occupancy and provide both owner occupants and public entities an advantage in submitting offers on Fannie Mae-owned foreclosed properties without competition from investors. Only offers from owner occupants and participants of the Neighborhood Stabilization Program are considered during the initial period a property is on the market. Offers from investors are considered after the First Look window has passed.[/pullquote_right]This on-going initiative offers owner occupant homebuyers, Neighborhood Stabilization Program NSP grantees and non-profits engaged in community stabilization efforts the ability to purchase HomeSteps homes during their initial 15 days of listing, without competition from investors. The purchaser does not need to be a first time homebuyer to be eligible provided, however, that they are buying the home as their primary residence.

The initiative supports Freddie Mac’s mission to stabilize communities and support housing recovery through the creation of affordable homeownership opportunities. Please read the following section below to familiarize yourself with the initiative.

First Look Eligibility and Identification

During the first 15 days 30 days in Nevada, a home is listed for sale in the Multiple Listing Service “MLS”. HomeSteps will consider purchase offers from owner-occupants, public entities or their designated partners. Buyers intending to purchase the property for investment, vacation, second home or similar purposes may submit offers to the listing broker and HomeSteps will consider them after the initial 15 listing days have expired.

Eligible Homes

All HomeSteps homes listed on or after September 17, 2010, are eligible for inclusion in the First Look.Agents may contact the HomeSteps listing broker with questions regarding the eligibility of a home; this information will also be included in MLS home listing information.

15-Day Window for Offers

Buyers must have their broker check the MLS or contact the listing broker to determine how many days are left under the First Look.

Applies to Primary Residence Only

The buyer and their selling agent must sign an affidavit affirming that the buyer will occupy the home as their primary residence. Parties that fraudulently sign the affidavit may be subject to criminal or civil liability.

Important Notes:

Multiple offers received during the 15-day Initiative time period are processed in the same manner as a normal transaction using the multiple offers procedure. Second home purchasers do not qualify for the First Look.

SOURCES:

Freddie Mac – HomeSteps.

Fannie Mae – Home Path

HUD – First Look Initiative

Filed Under: Buying, Marketing, REOs Tagged With: , , , , , , , , , , , , , , ,

FHA to increase mortgage insurance premiums a quarter of a point in 60 days

February 15, 2011 By Leave a Comment

The Federal Housing Administration is increasing its annual mortgage insurance premium one quarter of one point on all 15-year and 30-year mortgages backed by the agency.

The hike is in response to a congressional mandate that gave the FHA permission to increase premiums and keep its insurance fund liquid. The higher premiums also were outlined in President Obama’s 2012 fiscal budget, which estimates the FHA will insure $218 billion in loans during the 2012 fiscal year. The changes will effect loans issued on or after April 18.

Once the change takes place, the monthly insurance premium paid on a 30-year, fixed-rate FHA-insured loan will increase by $33[pullquote_right]After careful consideration and analysis, we determined it was necessary to increase the annual mortgage insurance premium at this time in order to bolster the FHA’s capital reserves and help private capital return to the housing market,[/pullquote_right].

On loans with amortization terms greater than 15 years, the FHA’s annual mortgage insurance premium will increase to between 110 and 115 basis points. For loans with amortization terms of 15 years or less, the annual premium is set to rise between 25 and 50 basis points.

After the transition, a borrower holding a 30-year, fixed FHA-insured loan valued at $163,000 will be paying $151 per month in premiums, compared to $118 under the current rates.

“After careful consideration and analysis, we determined it was necessary to increase the annual mortgage insurance premium at this time in order to bolster the FHA’s capital reserves and help private capital return to the housing market,” said FHA Commissioner David Stevens in a statement. “This quarter point increase in the annual MIP is a responsible step toward meeting the congressionally mandated 2% reserve threshold, while allowing FHA to remain the most cost effective mortgage insurance option for borrowers with lower incomes and lower down payments.”

The FHA also has relaxed some of its refinancing rules, declaring in a letter Monday that borrowers no longer have to be employed to get a streamlined refinancing.

In addition, the agency said on simple-rate refinancings where borrowers pay for their own closing costs with cash or higher rates, income and asset information is no longer required, which allows the refinancing to be completed with an abbreviated loan application. The changes go into effect 60 days after the official release of the FHA’s letter on Feb. 14.

Meanwhile, tighter lending rules remain in place for refinancing loan holders, with the FHA stipulating that closing costs cannot be financed for a simple rate without an appraisal.

The agency also said in order for homeowners to qualify for a refinancing, the monthly cost of their new loans must save them at least 5% or more. In addition, a borrower must be current on the loan a month prior to the refinancing.

SOURCE:  HousingWire

Filed Under: Financing, Mortgage and Loans Tagged With: , , , , , , , , ,

Massive Mortgage Changes

February 11, 2011 By Leave a Comment

Big news in the real estate world today!

Fannie/Freddie On Chopping Block –The white house came out with their mortgage reform options today, including the shut-down of Fannie/Freddie. There is a lot of analysis going on, here’s some from CNBC / CNN / WSJ

The Obama administration laid out three broad options Friday for reducing the government’s role in the mortgage market. All three would almost certainly lead to higher interest rates and costs for borrowers making it even harder to qualify for a home loan.

The administration said in a report that the government should withdraw its support for the mortgage market slowly, over five years or more. The report describes a path for winding down the troubled mortgage giants Fannie Mae and Freddie Mac.

But rather than making a single recommendation, the administration offered Congress three scenarios and will let lawmakers shape the final policy.

The options are:

  1. No government role, except for existing agencies like the Federal Housing Administration.
  2. A government guarantee of private mortgages triggered only when the market is in trouble.
  3. Government insurance for a targeted range of mortgage investments that already are guaranteed by private insurers. The government guarantee would kick in only if those private companies couldn’t pay.

The private sector will assume a greater role in housing finance under all of the options. The government currently owns or guarantees more than 90 percent of new mortgages.

Also, Cash Buyers Way Up - The WSJ is reporting a huge jump in all-cash real estate transactions – and many home sellers are actively seeking a cash transaction due to distress and the uncertainty of buyers to get a mortgage.

The actual report – If you prefer to read things for yourself, below is the report, Reforming America’s Housing Finance Market: A Report to Congress – The report may take a minute to load.

Download (PDF, 405KB)

Filed Under: Mortgage and Loans Tagged With: , , , , , , , , ,