Posts Tagged ‘Freddie Mac’

FHFA Announces Expansion of Program for Underwater Homeowners

Monday, October 24th, 2011
by Jann Swanson
FHFA Announces Expansion of Program for Underwater Homeowners
Oct 24 2011, 11:25AM

In advance of a speech in Nevada later today in which President Obama is expected to expand on the initiative, the Federal Housing Finance Agency (FHFA) has announced major changes to the Home Affordable Refinance Program (HARP).  FHFA unveiled what is essentially a widening of HARP to reach more borrowers in another effort to reverse the continuing flood of delinquent mortgages heading down the pipeline to foreclosure.

HARP is unique among programs designed to assist distressed borrowers in that it is intended to help those who are current on their mortgages but underwater, that is who owe more on their mortgages than the current market value of their homes.  Several studies have identified these borrowers as being likely to strategically default on or walk away from their mortgages.   Although Fannie Mae and Freddie Mac, the two government sponsored enterprises (GSEs) which are under FHFA conservatorship, have assisted about 9 million homeowners to refinance into lower-cost mortgages over the last few years, only about 10 percent of those were aided through HARP.  HARP, like the other major government foreclosure prevention initiative HAMP, the Home Affordable Modification Program, has been impeded by a lack of enthusiasm among lenders and servicers integral to the programs’ success.  In the case of HARP, the lenders objected to the possibility they might have to buy back delinquent loans if they weren’t scrupulously underwritten.  They thus tended to cherry pick the best loans which in turn limited borrowers from refinancing with other than their current lenders.

The current HARP limits the loan-to-value (LTV) ratio for a new loan to 125 percent (the program originally had a limit of 105 percent).  This effectively eliminates the most underwater homeowners and even leaves whole states, such as Nevada where large percentages of homeowners have negative equity above that amount, out of the program.

While regulations and guidance for the plan won’t be finalized for several weeks, relevant changes to HARP that were announced today include:

  • Removing the current 125 percent loan-to-value ceiling on refinanced mortgages;
  • Waiving risk-based fees on borrowers who take shorter term mortgages and reducing those fees for others;
  • Eliminating the need for a new property appraisal where there is a reliable AVM (automated valuation model) estimate provided by the GSEs;
  • Eliminating certain representations and warranties required of lenders to obtain the GSE guarantee. This will protect lenders from many of the buy-back requirements they face under current guidelines.
  • Extending availability of the program through the end of 2013.

FHFA said the changes to HARP were made with input from lenders, mortgage insurers, and other industry participants.  According to The Wall Street Journal, among the concessions made by the industry are agreements from private mortgage insurers to facilitate the transfer of existing mortgage insurance coverage and from most of the major lenders to ease the process of subordinating existing second mortgages to the new loans.

The changes in the program may double the number of borrowers using HARP according to some estimates, but still will serve only those borrowers who are current in their loans and who have loans owned or guaranteed by one of the GSE’s that were delivered to Fannie or Freddie prior to July 2009.  Thus it will impact only a small percentage of distressed borrowers in the country.

“We know that there are many homeowners who are eligible to refinance under HARP and those are the borrowers we want to reach,” said FHFA Acting Director Edward J. DeMarco. “Building on the industry’s experience with HARP over the last two years, we have identified several changes that will make the program accessible to more borrowers with mortgages owned or guaranteed by the Enterprises. Our goal in pursuing these changes is to create refinancing opportunities for these borrowers, while reducing risk for Fannie Mae and Freddie Mac and bringing a measure of stability to housing markets.”

Charles E. “Ed” Haldeman, Jr., Chief Executive Officer of Freddie Mac released the following statement on the program.  “This new phase of the Home Affordable Refinance Program (HARP) will help reach more borrowers with negative equity so they can refinance into new Freddie Mac mortgages at today’s historically low-rates. These changes mark another step on the road to recovery for the nation’s housing market and underscore Freddie Mac’s vital role in making affordable mortgage financing available to America’s homeowners and future homebuyers.”

Answers to Questions When Buying A Brooklyn Home ! Page 8

Wednesday, May 25th, 2011

Questions & Answers When Buying a Brooklyn Hme

81. HOW DOES MY CREDIT HISTORY IMPACT MY ABILITY TO QUALIFY?

The FHA is generally more flexible than conventional lenders in its qualifying guidelines. In fact, the FHA allows you to re-establish credit if:

 - two years have passed since a bankruptcy has been discharged
 - all judgments have been paid
 - any outstanding tax liens have been satisfied or appropriate arrangements have been made to establish a repayment plan with the IRS or state Department of Revenue
 - three years have passed since a foreclosure or a deed-in-lieu has been resolved

82. CAN I QUALIFY FOR AN FHA LOAN WITHOUT A CREDIT HISTORY?

Yes. If you prefer to pay debts in cash or are too young to have established credit, there are other ways to prove your eligibility. Talk to your lender for details.

83. WHAT TYPES OF CLOSING COSTS ARE ASSOCIATED WITH FHA-INSURED LOANS?

Except for the addition of an FHA mortgage insurance premium, FHA closing costs are similar to those of a conventional loan outlined in Question 63. The FHA requires a single, upfront mortgage insurance premium equal to 2.25% of the mortgage to be paid at closing (or 1.75% if you complete the HELP program- see Question 91). This initial premium may be partially refunded if the loan is paid in full during the first seven years of the loan term. After closing, you will then be responsible for an annual premium – paid monthly – if your mortgage is over 15 years or if you have a 15-year loan with an LTV greater than 90%.

84. CAN I ROLL CLOSING COSTS INTO my FHA LOAN?

No. Though you can’t roll closing costs into your FHA loan, you may be able to use the amount you pay for them to help satisfy the down payment requirement. Ask your lender for details.

85. ARE FHA LOANS ASSUMABLE?

Yes. You can assume an existing FHA-insured loan, or, if you are the one deciding to sell, allow a buyer to assume yours. Assuming a loan can be very beneficial, since the process is streamlined and less expensive compared to that for a new loan. Also, assuming a loan can often result in a lower interest rate. The application process consists basically of a credit check and no property appraisal is required. And you must demonstrate that you have enough income to support the mortgage loan. In this way, qualifying to assume a loan is similar to the qualification requirements for a new one.

86. WHAT SHOULD I DO IF I CAN’T MAKE A PAYMENT ON LOAN?

Call or, write to your lender as soon as possible. Clearly explain the situation and be prepared to provide him or her with financial information.

87. ARE THERE ANY OPTIONS IF I FALL BEHIND ON MY LOAN PAYMENTS?

Yes. Talk to your lender or a HUD-approved counseling agency for details. Listed below are a few options that may help you get back on track.

For FHA loans:

 - Keep living in your home to qualify for assistance.
 - Contact a HUD-approved housing counseling agency (1-800-569-4287 or TDD: 1-800-483-2209) and cooperate with the counselor/lender trying to help you.
 - HUD has a number of special loss mitigation programs available to help you:
 - Special Forbearance: Your lender will arrange for a revised repayment plan which may Include temporary reduction or suspension of payments; you can qualify by having an Involuntary reduction in your Income or Increase In living expenses.
 - Mortgage Modification: Allows refinance debt and/or extend the term of the your mortgage loan which may reduce your monthly payments; you can qualify if you have recovered from financial problems, but net Income Is less than before.
 - Partial Claim: Your lender maybe able to help you obtain an interest-free loan from HUD to bring your mortgage current.
 - Pre-foreclosure Sale: Allows you to sell your property and pay off your mortgage loan ,to avoid foreclosure.
 - Deed-in lieu of Foreclosure: Lets you voluntarily “give back” your property to the lender; it won’t save your house but will help you avoid the costs, time, and effort of the foreclosure process.
 - If you are having difficulty with an-uncooperative lender or feel your loan servicer is not providing you with the most effective loss mitigation options, call the FHA Loss Mitigation Center at (877) 622-8525 for additional help.

For Conventional Home  Loans:

Talk to your lender about specific loss mitigation options. Work directly with him or her to request a “workout packet.” A secondary lender, like Fannie Mae or Freddie Mac, may have purchased your loan. Your lender can follow the appropriate guidelines set by Fannie or Freddie to determine the best option for your situation.

Fannie Mae does not deal directly with the borrower. They work with the lender to determine the loss mitigation program that best fits your needs.

Freddie Mac, like Fannie Mae, will usually only work with the loan servicer. However, if you encounter problems with your lender during the loss mitigation process, you can coil customer service for help at 1-800-FREDDIE (1-800-373-3343).

In any loss mitigation situation, it is important to remember a few helpful hints:

 - Explore every reasonable alternative to avoid losing your home, but beware of scams. For example, watch out for:
Equity skimming: a buyer offers to repay the mortgage or sell the property if you sign over the deed and move out.
Phony counseling agencies: offer counseling for a fee when it is often given at no charge.
 - Don’t sign anything you don’t understand.

MORTGAGE INSURANCE

88. WHAT IS MORTGAGE INSURANCE?

Mortgage insurance is a policy that protects lenders against some or most of the losses that result from defaults on home mortgages. It’s required primarily for borrowers making a down payment of less than 20%.

89. HOW DOES MORTGAGE INSURANCE WORK? IS IT LIKE HOME OR AUTO INSURANCE?

Like home or auto insurance, mortgage insurance requires payment of a premium, is for protection against loss, and is used in the event of an emergency. If a borrower can’t repay an insured mortgage loan as agreed, the lender may foreclose on the property and file a claim with the mortgage insurer for some or most of the total losses.

90. DO I NEED MORTGAGE INSURANCE? HOW DO I GET IT?

You need mortgage insurance only if you plan to make a down payment of less than 20% of the purchase price of the home. The FHA offers several loan programs that may meet your needs. Ask your lender for details.

91. HOW CAN I RECEIVE A DISCOUNT ON THE FHA INITIAL MORTGAGE INSURANCE PREMIUM?

Ask your real estate agent or lender for information on the HELP program from the FHA. HELP – Homebuyer Education Learning Program – is structured to help people like you begin the homebuying process. It covers such topics as budgeting, finding a home, getting a loan, and home maintenance. In most cases, completion of this program may entitle you to a reduction in the initial FHA mortgage insurance premium from 2.25% to 1.75% of the purchase price of your new home.

If you would like to follow this series of questions and answers about buying your New Brooklyn Home Check it out here

If you’re looking for an experienced, energetic, resourceful  Brooklyn real estate agent or just have a few questions, give me Charles D’Alessandro your Brooklyn Realtor® with Fillmore Real Estate a call at (718) 253-9600 ext.206 or email me at [email protected]

Owe More than Your Brooklyn Home is Worth?

Sunday, August 8th, 2010

Owe More than Your Brooklyn Home is Worth?

If you’re a homeowner who is unable to refinance to a lower interest rate because your Brooklyn home’s value has decreased, there’s hope.

A program called the Home Affordable Refinance Program (HARP) has been extended for another year.  This program, intended to help borrowers whose homes have fallen in value, was due to expire as of June, 2010.  Fortunately, HARP has been extended and will now stay in effect through June 30, 2011.

How does HARP help?

The program allows qualified borrowers who owe more than their homes are worth to refinance at lower interest rates.  It’s projected to help 4 to 5 million homeowners with loans owned or guaranteed by Fannie Mae and Freddie Mac.

If you’re a Brooklyn home owner whose mortgage interest rate is significantly higher than the current market rate, you could see an immediate reduction in your payments.  However, some homeowners may not see their interest payments go down if they refinance to a fixed rate and payment.  Those include homeowners who are:

·        paying interest only

·        have a low introductory rate that will increase in the future

·        face a balloon payment

If you are one of these homeowners, you should still consider refinancing because it could save you a great deal of money by reducing the amount of interest you pay over the life of your mortgage.

Who qualifies for HARP?

You may qualify if:

  • You own and live in your home.
  • The loan on your home is owned or guaranteed by Fannie Mae or Freddie Mac.
  • When you apply, you are current on your mortgage payments.
  • The amount you owe on your mortgage does not exceed 125% of the current market value of your property.
  • You’re able to pay the new mortgage payments.
  • The refinance improves your ability to pay your mortgage long term.

If you have questions about HARP or any other  questions,I’m happy to help. Give me Charles D’Alessandro your Brooklyn Realtor® with Fillmore Real Estate a call at (718) 253-9600 ext.206 or email me at [email protected]



Charles D’Alessandro

[email protected]
tel 718 253-9600
fax 718 253-9573
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