Home Affordable Refinance Program – Not All Good
Real estate news
HARP 2 – Lifeline for Some Troubled Homeowners?
The government is changing its Home Affordable Refinance Program (HARP), making it easier for homeowners to refinance their underwater, high-interest mortgages.
HARP 2 – Major Features
- Although HARP has helped more than 890,000 homeowners nationwide by reducing their monthly mortgage payments, there are still millions of homeowners who are too far underwater to participate.
- Under the new rules, homeowners who owe more than 125 percent of the market value of their homes will be allowed to refinance into new loans.
- The program also streamlines the refinancing process for homeowners who are current on their mortgage payments and reduces or removes fees that previously hindered them from refinancing.
- Fannie Mae and Freddie Mac also will reduce the fees they charged in the past to enable borrowers to better afford the new loans. Among the fees that will be reduced or eliminated are those for appraisals, title insurance, and closing costs.
- Fees also will be waived for some underwater borrowers who are refinancing into 20-year or shorter-term loans.
- HARP is only open to borrowers who are current on their payments for the past six months with no more than one missed payment in the past 12 months. The loans must have been originally issued before May 31, 2009, and purchased by Fannie Mae or Freddie Mac. Read more
Home Affordable Foreclosure Alternatives
San Diego condominium
Government Sponsored Enterprises (GSE) Fannie Mae and Freddie Mac last week released guidelines for implementing the Treasury Dept.’s Home Affordable Foreclosure Alternatives Program (HAFA). The new guidelines apply to loans owned or guaranteed by the GSEs; servicers are required to implement the new policies no later than Aug. 1. Read more
The Government and Mortgage Backed Securities
The Federal Reserve is no longer buying mortgage backed securities from Fannie Mae and Freddie Mac. Some people worry mortgage rates could rise as a result. This video explains why home mortgage rates could increase.
Los Angeles attorneys
Home Loan Giants Fannie & Freddie $126 BILLION Loss
Kenneth Posner, author of “Stalking the Black Swan: Research and Decision-Making in a World of Extreme Volatility,” talks with Bloomberg’s Lori Rothman about Fannie Mae and Freddie Mac. Fannie Mae, the government-backed mortgage company under conservatorship, was toppled by conflict between its mission to foster homeownership and profit demand it faced as a publicly traded company, former regulators said
Escondido California real estate
New Government Home Mortgage Loan Modification Program
Freddie Mac
Freddie Mac and 13 national and local non-profit organizations recently announced the launch of Freddie Mac Borrower Help Centers. The centers are designed to encourage delinquent borrowers to pursue mortgage workouts. At the centers, Freddie Mac borrowers will receive free, confidential one-on-one mortgage counseling. The company also is launching a separate Borrower Help Network which will offer similar counseling services over the phone to targeted Freddie Mac borrowers.
Fannie Mae and Freddie Mac – Walking Dead
Goodbye and good riddance says Rep. Barney Frank to Fannie Mae and Freddie Mac. In his opinion, both mortgage agencies need to be closed for good. Once that’s accomplished, the housing finance system can be rebuilt right.
U.S. Mortgage Giants Fannie Mae and Freddie Mac Are Broke
San Diego home
America is relying on Fannie Mae & Freddie Mac to bail out the troubled housing market, yet Fannie and Freddie have needed bailouts of their own. Bose George, an analyst at Keefe, Bruyette & Woods, has reported that the quasi government mortgage giants have zero value to common shareholders. After nearly $100 billion government bailout, many believe these two will need the full $400 billion that the Treasury has already pledged if they are to survive. Read more
Fannie Mae and Freddie Mac Refinance Loans up to 125% of Value
Fannie Mae
If bad loans got us into this mess, can we expect more bad loans to get us out? The answer is YES if you are running the Fannie Mae or Freddie Mac government refinance programs. In a recent press release it was announced that the two government owned agencies will now refinance loans up to 125% of the current home’s value!
Did we not learn anything from the current, and continuing), housing bust? All facts from the mortgage industry and government point to the fact that mortgage default rates take a huge spike upwards with high loan to value loans.
I would venture to say that many of the mortgage debtors (in trust deed states) may not realize that by refinancing through this program, they will be going from a non-recourse loan to recourse refinancing, in many cases.
My bet is that actions like this will give a false sense of recovery for awhile, only to have us fall further in the future, much like the stimulus money is currently doing.
In his statement FHFA Director Lockhart said, “The higher LTV refinancing will allow more homeowners to strengthen their finances.” Do you really believe this? If the government really wanted people to stay in their houses, they would allow them to go into foreclosure and help them find alternative housing. Moving them into a 125% LTV recourse loan is setting them up for disaster and setting taxpayers up to take on the resulting new losses.
Perhaps the government is not being 100% honest in their touting this 125% refinancing program as a way to help people stay in their houses. In reality, it may actually be a way to help banks keep from writing down assets while they earn enough money to increase their capital base.
Living in California, I’m a little disappointed in the fact that our state tax and spend government did not come up with a comparable plan before the Feds. The fact that California has no budget, is issuing IOU’s and has upwards of a 26 billion deficit is no excuse. Just a few months ago California passed a new law giving new home buyers a credit of 5% of the purchase price up to $10,000. California set aside 100 million for this program. Now that the $100 million is almost exhausted, two new bills are pending in Sacramento to to double or triple the original $100 million.
San Diego homes for sales
New Relief Program For Homeowners at Risk of Foreclosure
Effective December 15, Fannie Mae and Freddie Mac the government-controlled mortgage underwriters, are sponsoring various relief plans for homeowners at risk of foreclosure.
Fannie and Freddie hold almost 60 percent of all U.S. mortgages. With this kind of reach, the new programs should have a real impact. Government officials said the program said it wasn't likely to stem the housing downturn on its own, but said it could help hundreds of thousands of homeowners. Plus, banks will receive an $800 fee for every loan that is reworked.
Like most homeowner relief plans, there are requirements that borrowers must meet to qualify:
- Be at least three months behind on their mortgage payments
- Owe the bank at least 90 percent of what the home is worth
- Live in the home as a primary residence
- Not be in bankruptcy
- Be able to prove that they're not just trying to skip out on the loan
- Loan must have been written before Jan. 1, 2008
- Loan must be held by Fannie or Freddie, or investors agreeing to participate.
Lenders will adjust interest and the length of the mortgage — extending them up to 40 years — and even principal to bring payments within 38% of the household gross income of the homeowner. The principal will still be owed, but it won't accrue interest.
Cramer Calls the Bottom in Real Estate Market
A Record Number of Homeowners Avoid Foreclosure in the Second Quarter
Summary of the “Housing and Economic Recovery Act of 2008
President Bush Signs Historic Housing Bill
Second Home Foreclosure Tax Penalty
Goverment’s FHASecure Refinances 200,000th Mortgage
183,000 Homeowners Get Help To Stay In Their Homes
Real Estate Subprime Mortgage Five-Year ARM Freeze Announced
Govt. Take Over Of Fannie Mae and Freddie Mac Could Cost Billions
The Wall Street Journal's Web site noted that it seems certain the Government may take over the nation's mortgage giants Fannie Mae and Freddie Mac this weekend.
Fannie Mae and Freddie Mac lost a combined $3.1 billion in the second quarter. But, just in the last two weeks both companies said they had enough resources to withstand the losses. Now, one must question these statements.
Together these two mortgage giants hold about half the U.S. mortgages. This news, together with the grim falling home values makes me question why the major news media are still not using the correct terminology for this situation … HOUSING DEPRESSION. Some of our prior popular posts on Fannie & Freddie were:
Stocks of Housing Giants Suffer Huge Losses
Summary of the “Housing and Economic Recovery Act of 2008
Real Estate – Jim Rogers says Fannie and Freddie are a ‘disaster’
Nation’s Mortgage Lender Records Loss of $2.2 BILLION +$1.1 BILLION Charge Off
Fannie Mae and Freddie Mac pump up to $200 billion into real estate market