Archive for the ‘HUD’ Category

FHA National Servicing Center Loss Mitigation Services

Communities across the United States are experiencing steady and even increasing rates of foreclosure, as well as an increase in the number of homeowners at risk of foreclosure. Each foreclosure event represents a potentially devastating impact on the homeowners that lose their homes, on the neighborhoods that experience a growing accumulation of vacant and abandoned housing and on the nation’s economic recovery which is largely dependent upon the stability of the housing market.
In response, The Federal Housing Administration (FHA), which is a part of the U.S. Department of Housing and Urban Development (HUD), is working aggressively to halt and reverse the losses represented by foreclosure. Through its National Servicing Center (NSC), FHA offers a number of various loss mitigation programs and informational resources to assist FHA-insured homeowners facing financial hardship, and whose mortgage is either in default or at risk of default.
FHA Home Affordable Modification Program (HAMP): FHA HAMP is designed to help FHA-insured borrowers who meet HAMP eligibility requirements to avoid foreclosure by permanently reducing their monthly mortgage payment through the use of a partial claim. The partial claim defers the repayment of mortgage principal through an interest-free subordinate mortgage that is not due until the first mortgage is paid off. Under the partial claim option, lenders are authorized to advance funds on behalf of a borrower, to reinstate a delinquent loan that is up to 12 months delinquent. HAMP will allow HUD to bring eligible FHA borrowers’ payments down to an affordable level. This will be accomplished by bringing the mortgage current, buying down the loan by up to 30 percent of the unpaid principal balance and deferring these amounts in a partial claim.

HOPE for Homeowners (H4H): The HOPE for Homeowners Program will refinance mortgages for borrowers who are having difficulty making their payments, but can afford a new FHA-insured loan. Call (800) 225-5342 for more information.

In addition to HAMP and H4H, FHA offers a variety of standard loss mitigation program options. A more extensive explanation of these options is available online here, and include:

FHA Loss Mitigation Home Retention Programs and Policies:

 - Special Forbearance Fact Sheet
 - Loan Modification Fact Sheet
 - Partial Claim Fact Sheet
 - FHA HAMP Fact Sheet
 - Servicing Loss Mitigation FAQs
 - Loss Mitigation Policy and Guidance

FHA Loss Mitigation Disposition Programs and Policies

 - Preforeclosure Sale Fact Sheet
 - Deed In Lieu Fact Sheet

FHA Home Equity Conversion Mortgage Program (HECM):

 - HECM Assignment Requests
 - HECM Foreclosure Sales Program, June 1, 2009
 - HECM Servicing FAQs
 - HECM ML 2011-01 FAQs

CONTACT FHA

FHA staff are available to help answer your questions and assist you to better understand your options as an FHA borrower under these loss mitigation programs. There are several ways you can contact FHA for more information, including:

 - Call the NSC at (877) 622-8525
 - The Online FHA Resource Center
 - Call the FHA Outreach Center at 1-800-CALL FHA (800-225-5342)
 - Persons with hearing or speech impairments may access this number via TTY by calling the Federal Information Relay Service at (800) 877-8339
 - Email the FHA Resource Center

Home Equity Conversion Mortgage (HECM) Borrowers:

U.S. Department of Housing and Urban Development National Servicing Center 2 West 2nd Street, Suite 400 Tulsa, OK 74103 Phone: (800) 594-9057 or (918) 292-8900 Fax: (918) 292-8984 Email: HECMServicing@deval.us

There are still homeowners in trouble with their mortgage.  Check the resources provided through these website links.   

Joan Parcewski, Realtor   www.JoanParcewski.com  978-376-3978   Joan@woodsre.com

 

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.

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