Archive for the ‘Fanne Mae’ Category

Hurricane News Overshadows All but One Bright Spot

Last weekend’s regular Massachusetts news should have been promoting all the usual upbeat feature stories about the onset of football season, the start of a brand new school year, the finals of tennis’ last grand slam tournament and the like—but Billerica readers would have gotten eye strain trying to find any of them. Instead, the dark clouds brought by Hurricanes Irma and Harvey cast dense shadows across the region and the nation’s news. It was certain, too, that even after the terror of their actual passages had subsided, the fallout would continue to reverberate—expensively—for a very long time.

What was covered was how the prayers of millions not directly affected were being answered by many thousands of Good Samaritan volunteers. That uplifting story was joined by another, too; a piece of hurricane-related real estate news. Too bad it was all but drowned out by the fury of the storms and their tragic aftermaths.

Nonetheless, for Harvey-stricken Houston area homeowners with home loans backed by FHA, Fannie Mae or Freddie Mac, the announcement came that evictions and foreclosures would be suspended immediately. Added: the same government-backed entities would forego demands for monthly payments for at least 90 days (along with hints that “in some cases” that relief might be extended for up to a year).

As for those just beginning the climb out from Hurricane Irma’s destruction, I think it would be all but inconceivable that the same relief won’t be swiftly forthcoming for those homeowners—even if the size and cost of that will eclipse the cost of defraying the Harvey-affected loans. The small print has it that interest will continue to accrue—but Billerica onlookers will probably agree that the immediate granting of this relief is more than welcome at this juncture.

It’s really too soon to be able to concentrate on what happens in the months and years to come­—but the future of the American story is entirely predictable. This year we may have lost focus on traditional late summer sports, but in the championship ring of our real world and our real communities, we don’t suffer knockdowns easily. In U.S. history, there are no true KOs; there won’t be this time, either. The communities Americans rebuild will be better than ever!

Joan Parcewski, Realtor & Notary

LAER Realty Partners           http://www.JoanParcewski.LAERRealty.com

JParcewski@LAERRealty.com    cell 978-376-3978

 

Laer Realty Partners     Joan_Parcewski (1 of 1)

 

Homestead Funding – Fannie Mae’s HomeStyle Renovation Loan

Have you found a property that is right for you but it needs work?  Consider a Fannie Mae HomeStyle Renovation Loan. 

It can finance i to improve a property using the “after-improved appraisal value”.  There is just one mortgage and one closimg.

Loan Limits are 1 family $417,000      2 family  533,850    3 family   645,300      4 family   801,950

All renovations begin after closing.    You have 6 months to complete the renovations.  You can finance up to 6 months mortgage payments if home cannot be occupied.

Want more information – contact Chuck Hirbour at Homestead Funding –

office   978-251-8558     cell 978-835-2777  chirbour@homesteadfunding.com

There are a variety of loan options ut there to meet your needs.  This is just one of them.

Joan Parcewski    Woods Real Estate   joan@woodsre.com

978-376-3978        http://www.JoanParcewski.com   http://justforseniorsrealestate.com

 

Short Sale Process to Speed Up Starting June 15th???

The following article originally appeared in the New York Times on May 24, 2012:

Starting June 15, the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, will require both agencies to give short-sale buyers a final decision within 60 days. (In a short sale, a lender agrees to accept less than the balance on a mortgage.)

Fannie and Freddie must also respond to initial requests for a short sale within 30 days of receiving the buyer’s submission.

“Short sales are huge right now,” said Peter Spino, the foreclosure services manager for Community Housing Innovators in White Plains, N.Y., a housing counselor certified by the Department of Housing and Urban Development. Distressed homeowners often prefer them to a foreclosure, he noted.

Expedited sales as a result of the new directive will benefit the entire housing market, said Michael McHugh, the president and chief executive of Continental Home Loans and the president of the Empire State Mortgage Bankers Association, a trade group. They could also remove some risks for buyers — many of whom previously had to wait months for a decision and then ended up not getting the house they wanted.

In March, the most recent month for which data were available, short sales represented more than 14 percent of existing home sales, according to CoreLogic, a data analytics company, compared with 12 percent for all of 2011 and about 10 percent in 2010. And as the number of short sales has risen, foreclosures have fallen. Completed foreclosures represented 25.3 percent of home sales in March, versus 34.9 percent in all of 2011 and 42.7 percent in all of 2010.

Lenders favor short sales because they are less costly and more efficient than foreclosures. Yet the homeowners, trying to exit as gracefully as possible, never know how long the process will take or how badly their credit will be hurt.

Although short sales have a reputation for being easier on credit scores than foreclosures, “that’s a fairly common misperception,” said Rod Griffin, the director of consumer and public education at Experian, one of the major credit bureaus. If there is a difference in impact, he said, it is slight. Both short sales and foreclosures remain on the credit report for seven years — but foreclosures don’t appear until the legal paperwork is filed, and that could take months, Mr. Griffin said.

The effect was measured in an analysis by VantageScore, a provider of credit scores used by lenders. The higher the credit rating a consumer has, the more points he or she would lose in a short sale.

If consumers started with, say, an 830 score, they would most likely lose 100 to 110 points from a short sale, 120 to 130 points from a foreclosure. But a homeowner with a 625 score, who is behind on his mortgage and some credit card payments, would lose 15 to 25 points from a short sale and 10 to 20 points from a foreclosure, the VantageScore analysis shows.

One major downside to a short sale has been the length of time it takes to process the transaction. “I have done short sales in 60 days, and I’ve also had them take a year,” said Peter J. Goodman, a real estate lawyer in Brooklyn. He typically tells clients to expect them to take 90 to 120 days.

Short sales today are being completed faster than they were a couple of years ago, Mr. McHugh said. About one-fourth of his mortgage business comes from short sales; five years ago it was almost zero.

Speeding up the short-sale process could be especially worthwhile in states like New York, where judicial foreclosures can take a year or longer. “There should be a significant improvement in the turnaround,” he said.

 

This information applies to everyone, not just those in New York.  If you think you may be in a short sale situation, contact an agent that has the credentials to help. 

Joan Parcewski, Realtor       Woods Real Estate (Billerica)    Joan@woodsre.com 978-376-3978   

LMC (loss mitigation certified)    SFR (short sale and foreclosure resource)  

CDPE (certified distressed property expert)

FHA’s New Limits on Financial Concessions from Sellers to Buyers

This is a reprint from Inman News (3/1/2012)http://lowes.inman.com and is information everyone should know and understand (sellers, buyers, agents)

    

The Federal  Housing Administration’s long-awaited rules on how much home sellers can  contribute to buyers’ closing costs are finally out — sort of.

Rather than  publishing final guidance on “seller concessions,” the agency put out  a Federal Register notice late last week saying, essentially: “OK folks,  here’s what we plan to do — but if you don’t like it, we’ll give you just 30  days to tell us why.”

As forecast  in an earlier column (see “FHA  may lower cap on seller concessions to buyers“), the almost-final rule  abandons the agency’s previous plan to impose a flat 3 percent, across-the-board  limit on settlement cost contributions by sellers that sweeten buyers’ deals.

That  approach was strongly criticized by the National Association of REALTORS® and by  prominent regional realty brokers as penalizing buyers and sellers in markets  with low to moderate home-sale prices.

Limiting seller  assistance to just 3 percent would smother sales, brokers complained, because  many closing costs are fixed and represent a larger percentage of the bottom  line in moderate-priced transactions compared with higher-cost sales.

To remedy  this, FHA officials now say the agency intends to adopt a more nuanced approach  under which the maximum allowable seller contribution can be the greater of  $6,000 or a percentage of the selling price, based on a sliding scale.

In some  cases, the current 6 percent cap will remain. In many others, it will dip far  below 3 percent and become a tiny fraction of what is allowed today.

For example,  in the sale of a $100,000 home, the maximum seller concession would be $6,000,  or 6 percent, under the new rule — the same as it is today.

On a  $120,000 purchase, it would be 5 percent ($6,000 is 5 percent of $120,000). At  a $140,000 selling price, the $6,000 cap would be 4.3 percent; at $180,000 it  would be 3.3 percent. At $200,000, the $6,000 cap would equal 3 percent, but  would still be one-half the $12,000 (6 percent) limit currently allowed.

All higher  sales amounts would be progressively more severely restricted by the 3 percent  limit. For instance, on a $300,000 home purchase the present FHA rule would  allow a seller to kick in as much as $18,000, but under the new cap that  assistance could not exceed $6,000 — far below even a 3 percent limit, which  would total $9,000.

In effect,  FHA wants to rein in what it sees as unacceptable distortions of the true  property value — and therefore its own risk of loss in the event of a default  — as transaction prices rise.

Left at its  current 6 percent across-the-board approach, FHA noted, sellers can throw in as  much as $43,785 in financial inducements to buyers in high-cost areas such as  California, New York and Washington, D.C., where the maximum conforming loan  limit is $729,750.

Fannie Mae  and Freddie Mac have long limited seller contributions to a flat 3 percent of  the selling price. The U.S. Department of Veterans Affairs allows 4 percent.

In its  proposed rule, FHA also took aim at certain types of seller assistance — particularly  those offered by some builders to bring buyers to the settlement table.

No longer  permissible under FHA’s revised definitions are seller concessions involving advance  payment of homeowner association fees, advance payment of mortgage interest for  a period of months, and “mortgage protection plans,” where borrowers  receive insurance policies free of direct charge that guarantee up to six  months of mortgage payments in the event of an unforeseen job loss or medical  disability.

“HUD  believes that these types of payment supplements, while permissible under  current seller-concession guidelines, are really inducements to purchase and  should be treated as such,” the agency said in its proposal.

To the  extent that builders or other sellers continue to make such offers to buyers,  FHA intends to subtract them, dollar for dollar, from the sale price of the  house before calculating the loan-to-value limit on the insurable mortgage  amount.

Still  acceptable to FHA under the proposed changes:

  • actual  closing costs;
  • prepaid  expenses;
  • loan discount  points; and
  • the  upfront mortgage insurance premium charged by FHA.

Though NAR  has not commented publicly yet on the FHA proposals, homebuilders are unhappy  with the rollbacks and new restrictions.

“This  is going to impinge on (builders’) ability to sell homes,” David Ledford,  senior vice president for regulatory affairs at the National Association of  Home Builders, told me.

Worse yet,  he said, FHA is planning to change the rules “at a very inopportune time”  in the market cycle, “just when there are ‘green shoots’ ” of  recovery sprouting up — in the form of higher traffic and slowly increasing  sales — in markets around the U.S.

In  particular, he added, many builders now routinely offer to pay a limited period  of homeowner association dues for their buyers, but now they may have to cut that  practice.

Steve A. Brown,  executive vice president of Crye-Leike REALTORS®, a large regional brokerage  based in Memphis, told me that in relatively moderate housing-cost areas such  as where his firm operates, FHA’s new sliding scale on sellers assistance caps “should  not have a huge impact, especially if agents advise clients to close toward the  end of the month to minimize prepaid interest, (which is) a large variable in  closing costs.”

In higher-cost  areas, however, it will be a whole different story.

Fee Hikes/Mortgage Relief News from Fannie/Freddie

This information is coming from the Mass Assn of Realtors and is great news to unemployed borrowers.  

Fannie Mae will require mortgage servicers to install a new program providing forbearance relief to unemployed borrowers beginning March 1 for up to six months of relief without getting approval from the government-sponsored enterprise. Freddie Mac will begin offering 12-month forbearance plans on Feb. 1.  In addition, FHFA has directed Fannie Mae and Freddie Mac to increase their guaranty fees effective April 1. NAR opposed the increase in fees to pay for non-housing-related purposes. Lenders who will pass the increase on to borrowers will likely increase the rate offered by .1 percent sometime before April 1, 2012.

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