Realty Reality: mortgages

Showing posts with label mortgages. Show all posts

Saturday, July 12, 2008

How To Avoid Foreclosure On Your Home

Foreclosure means more than just the loss of your family home. It means that you will lose any equity that you have may have in the house. It also means that your credit with be severely effected for a long time and may even keep you from purchasing a home again.

However, there are alternative steps you can take with the help of an experienced real estate agent who is also a foreclosure prevention specialist (FPS). These options range from modifying your mortgage to selling your home even if you have no equity and moving into a new home. In short, you don't have to lose your home to foreclosure.

You can stop foreclosure on your home and save your credit, but you have to act quickly and learn what options are available for your situation.

Contact Me for a brief special report: "How To Avoid Foreclosure On Your Home" or to discuss in more detail the next steps you may be able to take and avoid foreclosure.

Visit my web site for community information, real estate services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Thursday, June 19, 2008

FHA Reaching Out to At-Risk Homeowners

FHA IS REACHING OUT TO 675,000 AT-RISK HOMEOWNERS IN SECOND PHASE OF DIRECT MAIL CAMPAIGN

Hundreds of thousands of homeowners urged to consider safer, more affordable FHA-backed mortgages.

WASHINGTON - This week, HUD's Federal Housing Administration (FHA) is mailing hundreds of thousands of letters to homeowners at risk of losing their homes through foreclosure and urging them to consider a safer, more affordable alternative to the high-cost mortgages they are currently paying. The first round of 280,000 letters was mailed in February. FHA's public awareness campaign will continue through September, ultimately reaching 850,000 distressed homeowners.

"This letter might be the most important piece of mail many of these families will receive all year," said HUD Secretary Steve Preston. "This information could not only help save their current home, it could help provide them with long term financial security. This outreach campaign will ensure families are aware of the safe mortgage alternative offered by FHA."

Letters are being sent to homeowners who have already faced or are experiencing the first reset of their adjustable rate mortgages. Through the end of the year, FHA can insure home loans valued between $271,050 and $729,750. Normally these loan limits are set between $200,160 and $362,790 but were expanded through President Bush's Economic Stimulus Package. Bipartisan FHA Modernization legislation awaiting final action by the Senate and House of Representatives would permanently increase the loan limits to an acceptable level.

FHA-insured loans are backed by the full faith and credit of the government, which typically allows lenders to offer mortgage products at a lower, more affordable interest rate. More than 90 percent of FHA-backed mortgages are 30-year, fixed rate products. FHA also provides a one-of-a-kind loss mitigation program that helps protect borrowers against foreclosure. Finally, FHASecure, which allows borrowers who are current and delinquent on their loans to refinance with the FHA, is saving tens of thousands of families on average $400 a month compared to their exotic subprime loans.

Below is a copy of the letter being sent to homeowners...

-----

Dear Homeowner,

Do you need help with your mortgage?

Your area is experiencing a disturbing home foreclosure rate that has accelerated in recent months. News reports cite the damaging effects of "sub prime loans" as a major factor in the unsettled market. By focusing on education and safe mortgage alternatives, though, the Federal Housing Administration (FHA) of the United States Department of Housing and Urban Development (HUD) is working diligently to address this unacceptable foreclosure trend.

Over the past few months, FHA has worked with mortgage loan servicers to identify solutions for the crisis facing current homeowners. Your current mortgage does not have to be FHA insured for you to benefit from our help. If you are facing financial difficulties due to a recent or imminent mortgage reset, or other housing-related difficulty, I urge you to contact us at 1 (800) CALL-FHA or to visit www.fha.gov. There you will have the opportunity to learn about foreclosure prevention, legal rights, and credit counseling, among other topics.

Many homeowners may also be able to take advantage of our recently announced FHASecure program. This new program allows eligible homeowners to refinance into a secure, fixed-rate FHA loan even if they are in default.

Additionally, a new partnership between mortgage companies and non-profit housing counselors called HOPE NOW is available to you. Their mission is simple: reach out to homeowners who may be having difficulty paying their mortgages. For more information or to see if your mortgage company is a member of this caring coalition please go to www.hopenow.com.

Again, please contact us at 1 (800) CALL-FHA (800-225-5342) or go to www.fha.gov. As part of the federal government, the Federal Housing Administration wants to help you protect and preserve the American dream - your home.

Sincerely,

Brian D. Montgomery
Assistant Secretary for Housing
Federal Housing Commissioner

###

HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development, and enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov. For more information about FHA products, please visit www.fha.gov.

Source: HUD No. 08-086

Visit my web site for additional services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Tuesday, June 10, 2008

HUD: Setting The Record Straight

The following was posted on HUD's new News Release page...

"Today (June 10, 2008), the Washington Post, citing former HUD officials and academics, claimed HUD’s affordable housing goal requirements of Fannie Mae and Freddie Mac helped to fuel the collapse of the subprime mortgage market. This is a gross misrepresentation of much larger forces that were at work in the mortgage market. We believe it’s time for a reality check..."

You can decide for yourself who has the straight record:

Full HUD Article (6/10)

Original WP article (6/9)

Tuesday, June 03, 2008

HUD Study Finds Consumer Confusion Leads To Higher Closing Costs

WASHINGTON - Many American consumers overpay by thousands of dollars in total closing costs when they purchase their homes, according to a recent nationwide report from the Urban Institute (UI). The study found that there are significant and unsupported variations in loan charges, title fees and other closing costs charged to homebuyers, and that minority borrowers pay hundreds of dollars more in total loan origination fees than do non-minority homebuyers.

In A Study of Closing Costs for FHA Mortgages, noted economist Dr. Susan Woodward analyzed more than 7,500 mortgages originated in May and June of 2001, a period of relative interest rate stability. The Urban Institute's study found significant disparities in closing costs even when it compared borrowers with identical credit scores, loan terms and mortgage amounts. In addition, variations appeared to be based on education level, geography, race and ethnicity. Even after accounting for these factors, there remain very substantial variations in what consumers pay at settlement.

"This report demonstrates once and for all that the process consumers endure when they buy their homes is entirely too confusing," said HUD Deputy Secretary Roy A. Bernardi. "Clearly, we need to open the window and allow consumers to understand the fine print and shop more effectively for the largest purchase of their lives."

HUD is currently proposing to improve disclosure of the loan terms and closing costs consumers pay when they buy or refinance their home. For the first time ever, HUD is proposing that all mortgage lenders and brokers provide consumers with a standard Good Faith Estimate. By more openly disclosing the key elements of the loan and by controlling "fee creep" at closing, the Department seeks to provide consumers with enough information to allow them to shop for the lowest cost loan. In addition, HUD's proposed Good Faith Estimate will promote comparison shopping and market competition by clearly articulating to borrowers their total estimated settlement charges. Ultimately, HUD's own economic analysis finds that by offering consumers clearer, more certain cost estimates, the average borrower will save approximately $700.

Key findings of the report include:

- Total loan fees can vary by thousands of dollars from borrower to borrower even for the same loan amount.
- Loan charges and title fees vary considerably from state to state even for similar loans. Even in the same state, disparities in title costs among identical borrowers can be more than $1,000.
- On average, borrowers see no reduction in out-of-pocket fees when they agree to higher interest rates. Ideally, consumers ought to receive a dollar-for-dollar credit for paying a so-called "yield spread premium" that results from agreeing to a higher interest rate loan. In fact, many borrowers see no reduction at all and even pay more in total loan fees.
- African-American families pay an average of $415 more in total loan origination fees than non-minorities.
- Hispanic borrowers pay an average of $365 more in total loan origination fees than non-minorities.
- Consumers obtaining loans for which comparison shopping is easiest, so called "no-cost loans," enjoyed an average cost savings of $1,200.

Brian Montgomery, HUD Assistant Secretary for Housing and Federal Housing Commissioner, said, "The core problem is that too many Americans sign a mountain of documents they don't understand and pay thousands of dollars for services that they've probably never heard of. This report proves that the more informed you are, the less you pay. Our common goal should be to increase competition and transparency, and to help take the mystery out of buying a home."

Dr. Woodward examined data from a national sample of 7,560 FHA-insured, 30-year fixed-rate home purchase loans. Data were collected on how much borrowers paid for lender or broker services, title services and real estate agent services. The data were then linked to information on borrower and loan characteristics including loan amounts, interest rates, credit history, income, borrowers' race and ethnicity and the racial composition and educational attainment in the borrower's neighborhoods.

Woodward is an expert in financial economics and has held appointments in both academia and government. She has been on the faculties of the University of California at Los Angeles and at Santa Barbara and the University of Rochester's Simon School. She has also served as Chief Economist of the Securities and Exchange Commission (SEC), Chief Economist of HUD, and Senior Staff Economist for Financial Markets and Institutions at the Council of Economic Advisers. Dr. Woodward is currently the founder and chairman of Sand Hill Econometrics, Inc. in Palo Alto, California.

The Urban Institute is a nonprofit, nonpartisan policy research and educational organization that examines the social, economic, and governance problems facing the nation. The views expressed are those of the author and should not be attributed to the Urban Institute, its trustees, or its funders.

To read the full report, visit HUD's website.

Friday, May 30, 2008

New Commercial and MultiFamily Inspection Form Released By MBA

The Mortgage Bankers Association (MBA) recently announced the completion and implementation of a new commercial/multifamily real estate property inspection form for various property types including Office, Retail, Multifamily, Healthcare, Lodging and Industrial.

The updated inspection form already has industry-wide adoption by servicers for all funding sources including Fannie Mae and Freddie Mac. The form will not be used by the Federal Housing Administration (FHA).

Click here to view the new commercial/multifamily property inspection form and reference guide, please click “MBA Master Inspection Form” upon visiting the following Web link.

Full Story...

Source: MBA

Monday, May 19, 2008

AD Campaign to Fight Lending Descrimination Launched by HUD

HUD LAUNCHES AD CAMPAIGN TO FIGHT LENDING DISCRIMINATION
WASHINGTON - The U.S. Department of Housing and Urban Development (HUD) announced today that it has launched a national public service announcement (PSA) campaign that will educate the public, especially minorities, about their rights under the lending provisions of the federal Fair Housing Act.

The centerpiece of the bilingual campaign is a television PSA featuring Dennis Haysbert, who is best known for his role as President Palmer in the Emmy award-winning television series "24."

The PSA shows Haysbert, sitting in a café, drawing his dream home on a napkin and explaining that it is illegal to discriminate in lending because of someone'srace, color, national origin, religion, sex, familial status, or disability.The PSA ends with the tagline "HUD - One Call. Many Answers," and encourages people to call HUD's fair housing hotline, 1 (800) 669-9777, or log onto HUD's Web site, www.hud.gov/fairhousing, if they believe they have experienced lending discrimination.

The campaign, which is being administered by West Coast-based Pacific News Service, also includes radio PSAs and newspaper ads that illustrate the kinds of challenges many minority homebuyers face when they attempt to purchase a home. The campaign is in both English and Spanish. In addition, the campaign will include a series of fair lending forums designed to inform faith-based organizations, housing professionals, and the general public about HUD resources and programs that can assist in eradicating unfair and discriminatory lending practices.

"HUD studies confirm that African Americans and Hispanics trying to become homeowners are often given less information about loan terms, are quoted higher rates and fees, and are sometimes discouraged from applying for loans," said Kim Kendrick, HUD's Assistant Secretary for Fair Housing and Equal Opportunity. "Hopefully, this compelling campaign will empower existing and prospective minority homeowners to report these incidents so that they can receive help."

The Fair Housing Act makes it unlawful to discriminate in the sale, rental, and financing of a home on the basis of race, color, religion, sex, national origin, disability, and familial status.

FHEO and its partners in the Fair Housing Assistance Program investigate approximately 10,000 housing discrimination complaints annually. People who believe they are the victims of housing discrimination should contact HUD at 1 (800) 669-9777 (voice), 800-927-9275 (TTY). Additional information is available at www.hud.gov/fairhousing.

Friday, May 16, 2008

Fannies Mae's Withdrawal of Declining Market Policy Will Help Housing Market

Fannie Mae today withdrew its declining market policy and adopted uniform national downpayment requirements, making financing more affordable and available and stabilizing the credit markets, said the National Association of REALTORS®(NAR).

NAR and other real estate and banking organizations have been calling on both Fannie Mae and Freddie Mac to change their declining market policies, which disproportionately affects minorities and lower income families and communities as well as first-time home buyers, further contributing to the sluggish housing market.

“These new policies will help stabilize the credit markets, which will help encourage buyers to come back into the housing market,” said NAR President Dick Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif. “The former policy was not good for many potential homeowners, and bad for the housing market because it stigmatized communities with lower sales and prices. We are pleased Fannie Mae took action to remove the extra 5 percent down payment on homes in declining markets.”

Gwen MuseEvans, Fannie Mae vice president for credit policy and controls, told hundreds of REALTORS® earlier in the week that Fannie Mae would be replacing the existing policy that required higher minimum downpayments for properties in markets that are considered declining, for a policy that allows buyers to borrow up to 97 percent loan-to-value, even in markets in which prices have declined. “We heard the concerns of NAR and we reviewed and determined that changes in our policy were needed,” said MuseEvans.

“The Fannie Mae decision is huge and will have a positive impact, perhaps significantly, on the housing market. We are very appreciative to Fannie Mae for listening to us and agreeing that these changes were needed to help more families achieve the dream of homeownership,” said Lawrence Yun, NAR chief economist.

The National Association of REALTORS®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

Fannie Mae's News Realease Regarding Decision

Thursday, April 17, 2008

Freddie Mac To Buy Conforming Jumbo Mortgages

Freddie Mac announces an agreement with major mortgage lenders, Wells Fargo Home Mortgage, Chase, CitiMortgage and WaMu, to buy conforming jumbo mortgages in high cost markets. Qualified borrowers can now apply for an array of fixed-rate or adjustable rate conforming jumbo mortgages that will be less expensive than non-conforming jumbo loans. (April 17, 2008, Freddie Mac)

More Information. . .

Friday, April 11, 2008

Senate Passes Bill to Ease Foreclosure Housing Crisis

The Senate passed the Foreclosure Prevention Act on Thursday that combines large tax breaks for homebuilders and a $7,000 tax credit for people who buy foreclosed properties, as well as grants for communities to purchase and fix up abandoned homes. Opponents argue that this tax credit would unfairly reward purchases that would have happened anyway while possibly devaluing other homes. The bill likely will be significantly redrawn by critics in the House. (AP, April 10, 2008, MSNBC.com)

Read more about the tax credit. . .

Saturday, April 05, 2008

Foreclosure Resources for Consumers from the Federal Reserve

If you are having difficulty making your mortgage payment, one of the most important things you can do is seek assistance. The following resources provide information and links to agencies and organizations that may be able to help you...

More Details...

Visit my web site for additional services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Sunday, March 30, 2008

Renegotiating Troubled Mortgages

According to the FHA, if you are facing a potential foreclosure, you need to gather and prepare the following:

1. Loan number and recent payment history.

2. Brief expalnation of circumstances. Are financial problems temporary or permanent?

3. Recent income documentation, including paystubs or tax returns.

4. A list of household expenses -- utility bills, food, insurance.

5. A list of other debt obligations -- credit card, car loans, etc.

You also need to be aware of foreclosure laws in your state. A place to check on the web is www.foreclosurelaw.org.

You must then determine from your mortgage agreement what is allowed under state law regarding, "Notification of intent to foreclose", "Nonjudicial foreclosure", "Right of redemption" and "Deficiency Judgement".

If you or your spouse is on active military duty, you are protected under the Civil Relief Act of 2003 from a lender foreclosing.

See also my previous foreclosure articles on my ActiveRain blog site.

Friday, March 28, 2008

Bush In New Jersey Discussing Housing, Economy and Hope Now

U.S. President George Bush appeared in Freehold, Monmouth County, NJ today to praise a local non-profit company, Novadebt, which provides credit counseling to consumers who are burdened with heavy debt.

This was Bush's first visit to Monmouth County since he was President. He gave a speech to the press and then talked with members of the company, a couple of homeowners who were helped by the program, and then toured the offices shaking hands and talking with employees.

The President talked about the HOPE NOW Alliance, which is a private-sector group of lenders, loan servicers, investors, mortgage counselors. He encouraged anyone worried about losing their home to call 1-888-995-HOPE.

Bush said that the program has so far helped 130,000 people refinance their mortgages and expect to help 300,000 by the end of the year.

Related information:
Text of Bush's Speech
The Mortgage Forgiveness Debt Relief Act of 2007
White House: Homeownership
Hope Now Alliance

Thursday, March 27, 2008

U.S. Officials Warn of Scams Targeting Homeowners

Federal officials say a wave of opportunistic scams are targeting homeowners trying to avoid foreclosure in the current housing downturn... (Source: WSJ Online)

Full Story...

Tuesday, March 25, 2008

Refinancing Your Mortgage

Radio airwaves, magazines and newspapers are filled with advertisements from lenders encouraging homeowners to refinance their home mortgages. These messages extol the virtues of switching from Adjustable Rate packages to fixed mortgages to lock in lower interest rates. The question is: would refinancing your mortgage really be the right move for you?

Rise of the Refi

Interest rates have fallen dramatically since the first of the year, and as a result mortgage refinancing has been gaining steam across the country. Applications to refinance existing mortgages have been on the rise in recent weeks. Many of these homeowners are just as attracted to the possibility of getting out of riskier Adjustable Rate Mortgages as they are to lower rates.

Whether or not you should refinance your mortgage depends largely on your personal circumstance. Most important are the interest rate and terms of your current mortgage as well as your outlook (how long you intend to own your home).

The conventional wisdom has always been that you shouldn't refinance until the interest rate has dropped a full point (or more) below what you're currently paying. The basic theory behind this advice is sound enough: given the typical costs associated with refinancing, chasing lower interest rates is only financially sound once the rates drop below a certain threshold. But the old rules fail to take into account some of today's situations, such as owners wanting to switch from an ARM to a fixed rate mortgage or those eyeing a "no-cost" refi.

Things to consider

As with most money matters, there is no "one-size-fits-all" answer to the refinancing question. If you're considering refinancing, consider these elements:

Rate - Interest rates have been dropping throughout 2008, and a large number of homeowners are seeking to take advantage by locking into lower rates. Some believe that it is better to wait and see if rates will continue to drop, owing that the general trend has been downward. On the other hand, the current rates are a known commodity that you may wish to take advantage of.

Risk - Historically the main motivation for refinancing a mortgage has been to secure a loan with a lower interest rate. But many homeowners are now seeking to refinance mainly for the kind of security that ARM products typically can't offer. If you have concerns over future fluctuations or spikes in interest rates, you may wish to lock in a fixed 15 or 30 year fixed rate mortgage, particularly if there is no annual or lifetime cap on the amount that your current loan can increase.

Term - In addition to the rate and structure of your loan, take into account the term of your current loan and any potential refinance. For example, if you've already paid off eight or nine years of your current mortgage, you might find opportunity in a fixed 15-year or 20-year loan as opposed to the more common 30-year product. In general, extending the total term of your loan will negate the benefits of lower interest rates, so try to keep the bigger picture in mind.

Closing Costs - As with primary mortgages, refinancing a mortgage entails up-front expenses. Many lenders are offering refinancing packages with modest out-of-pocket expenses. Even if lower than average, these costs may be substantial and additional fees may be added to your loan balance. Some lenders are even offering "no-cost" refinancing in order to attract homeowners. Remember that in such cases you'll likely not get the lowest interest rate available in the market. Be sure to carefully weigh the benefits of any "no-cost" package against those of traditional refinances available to you.

The Break-Even Point

Unless you've secured no-cost refinancing, you'll need to weigh the cost of the new loan against the amount you'll save over the term of the loan. One simple way to determine if refinancing is in your best interest is to determine the amount of time (with your monthly savings) it would take to recoup any fees or closing costs.

To start you'll need to determine your (potential) monthly savings. Review your payment coupon to verify the amount of your current monthly interest and principal. After establishing the rates and loan packages that you qualify for, ask your loan officer or mortgage broker for an estimated monthly payment. Many online mortgage calculators can also help you determine monthly costs if given the principal loan conditions.

You can now use that monthly savings to determine the point at which you'll begin to see a real return. For example, say refinancing will entail $2000 in costs but will save you $50 every month in payments. If you divide the mortgage fees by the monthly savings you find that the "break-even" point is 40 months from now. After that point the monthly savings would no longer be mitigated by the up-front costs.

Again, your personal situation determines whether or not the prospect of refinancing is truly viable. If you plan to own your home for many years or the cost of refinancing is very low, then you're more likely to realize the benefit of securing a new mortgage.

The article is taken from one of our recent Newsletters that was e-mailed to all registered subscribers, via our RE/MAX of New Jersey web site.

Friday, March 21, 2008

State-by-state Analyses of Subprime Losses

The Center for Responsible Lending (CRL) has a state-by-state analysis for sub-prime losses that can be downloaded as a PDF file.

Click here to download report.

Court-supervised modifications: Preventing foreclosures and lost community wealth

No matter where you live, the subprime crisis is causing unnecessary foreclosures and draining resources in your community. By lifting the ban on court-supervised load modifications for qualified homeowners, Congress can help nearly 600,000 families nationwide keep their homes and help communities retain an estimated $89 million in tax revenues. (Source: CLI)

Click here to find out the impact Senate bill S. 2636 could have on a particular state.

Visit my web site for additional services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Thursday, March 20, 2008

HUD: Proposes Reforming RESPA and Standardizing the Good Faith Estimate

Hud Proposes Mortgage Reform to Help Consumers Better Understand Their Loan, Shop For Lower Costs.

To help home buyers better understand their loan terms and reduce consumer settlement costs, HUD has introduced a proposed rule to the Real Estate Settlement Procedures Act (RESPA).

HUD's proposal reforms the more than 30-year old rules of the Real Estate Settlement Procedures Act (RESPA), and improves disclosure of the loan terms and closing costs consumers pay when they buy or refinance their home. For the first time ever, HUD is proposing that mortgage lenders and brokers provide consumers with a standard Good Faith Estimate. By more openly disclosing the key elements of the loan and by controlling fee inflation, the Department seeks to provide consumers with enough information to allow them to shop more effectively for the lowest cost loan. HUD's economic analysis finds that by offering consumers clearer, more certain cost estimates, the average borrower will save nearly $700.

Full Story...

Source: HUD No. 08-033

Summary Note: The rules include a mandatory four-page Good Faith Estimate (GFE) and a modified HUD-1/1A; a required "closing script" to be read orally at settlement; enhanced disclosures; and new rules concerning volume discounts, average cost pricing, and "required use." The rules have a 60-day public comment period expiring on May 13. (Source: NJAR)

Visit my web site for additional services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Thursday, March 13, 2008

New Foreclosure Rescue Plan Offers 'Help Now'

A bold new proposal to combat foreclosures was unveiled. The plan, dubbed "Help Now," was floated by the National Community Reinvestment Coalition It calls for the government to buy up at-risk loans, restructure the terms to make them affordable and sell the reworked loans back into the secondary market. (Les Christie, March 13, 2008, CNNMoney.com)

More Information. . .

Thursday, March 06, 2008

Look Up FHA Mortgage Limits In Your Area

HUD provide a page that allows you to look up the FHA mortgage limits for your area or several areas, and then list them by state, county, or Metropolitan Statistical Area.

FHA Mortgage Limits Lookup

You may download the mortgage limits data and it's file description using the File Layouts Page

Thursday, February 28, 2008

Freddie Mac Expands Guidance to Mortgage Sellers on Use of OFHEO Index

To improve the identification of declining markets, Freddie Mac has provided specific guidance regarding the use of the Office of Federal Housing Enterprise Oversight (OFHEO) House Price Index (HPI) in assisting lenders in determining whether a reduction in maximum financing is required.

The guidance issued February 21 expands on guidance issued last November Freddie Mac, which advised sellers of its use of the OFHEO Index in helping to identify markets where home prices may be declining.

The latest guidance offers sellers a formula when using the OHFEO HPI to identify declining markets at the Metropolitan Statistical Area level. Per the Guidance, sellers are to consider that home prices are declining in the MSA in which a property is located if either:

· The overall decline in the OFHEO Index for the MSA for the most recent two quarters is greater than 1 percent; or

· There is an overall decline in the OFHEO Index for the MSA year-over-year, unless there is overall growth in the OFHEO Index for the MSA in the most recent two quarters.

“Using the criteria above, home prices in the MSA in which a property is located may be declining; however, there may be smaller geographic areas within the MSA that have stable or increasing property values. Freddie Mac expects Sellers to examine the appraisal and other information sources with care and perform a rigorous analysis to determine whether in fact the property is located in a geographic area within the MSA where home prices are declining,” according to the guidance.

The guidance reminds sellers that Freddie Mac holds the Seller accountable for the quality, integrity and accuracy of the property valuation.

The full guidance is available at www.freddiemac.com/sell/guide/bulletins/pdf/bll022108.pdf.

Source: Appraisal Institute

Visit my web site for additional services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Thursday, February 14, 2008

Lenders Offer Broader Mortgage Help

Project Lifeline is a new program the Feds and six big home lenders unveiled to help people who are seriously behind on mortgages. The plan will allow homeowners to suspend foreclosures for 30 days while lenders try to work out more affordable loan terms. (Source: USAToday.com, The Associated Press, February 12, 2008)

More Information . . .

Visit my web site for additional services and support: LawrenceYerkes.com [PA]