This article appearing in today's Wall Street Journal by By KAREN BLUMENTHAL, offers very good advice to homeowners who are 'underwater' in their homes.
There are loan programs offered by the Stimulus Program that provide qualified homeowners with the ability to refinance up to 125% of their homes current value. Feel free to email me or call me if you are interested in finding out if you qualify. TomDrasler@cox.net or 714-478-3153
-------------------------------------------------------------------------------------
What does being "underwater" in your house really mean? Probably not that you're drowning.
The number of underwater homeowners -- those who owe more on their mortgages than their home is now worth -- has been growing sharply since 2006 as real-estate prices have tumbled. By some estimates, between one in six and one in eight homeowners are in that position, most of them people who bought homes in the past few years or who put down small or no down payments.
This worries economists and policy makers, since owing more than your home is worth is the first step toward foreclosure. And it's a concern to the rest of us because foreclosures are roiling the financial markets and, closer to home, they drag down our neighborhoods. (Most people who still have equity, by contrast, would rather sell their houses at a loss than lose what's left of their investment.)
View Full Image
Getty Images.In response to concerns about rising foreclosure and delinquency rates, federal regulators are studying possible new programs aimed at needy homeowners. There are concerns that such programs could attract a flood of applications from those who don't truly need assistance or encourage lenders to push homeowners into foreclosure. At the same time, lenders such as J.P. Morgan Chase and Bank of America have committed to working on new loan terms for the most-distressed homeowners.
But experts who have studied previous sharp housing downturns in Texas, California, New York and Massachusetts say that being underwater, while unpleasant, doesn't lead huge numbers of homeowners to default on their mortgages and end up in foreclosure.
Christopher L. Foote, Kristopher Gerardi and Paul S. Willen of the Boston Federal Reserve Bank studied more than 100,000 homeowners who were underwater in Massachusetts in 1991 and found that just 6.4% of them lost their homes to foreclosure over the next three years, according to a paper published in the September Journal of Urban Economics. The vast majority of homeowners simply continued paying as usual because they focused on the affordability of their payments, not on what they owed, and they believed home values would eventually recover.
.The economists found that homeowners typically lost their homes only after at least two things happened: Their home values dropped and they either couldn't afford the payments or stopped making payments after losing hope that prices would eventually recover.
Homeowners in California also were more likely than expected to keep paying during the deep 1990s slump, says Richard Green, director of the Lusk Center for Real Estate at the University of Southern California. More people turned in their keys in Ohio and Michigan during the difficult 1980s downturn because they lost faith in an economic turnaround.
Typically, homeowners fall behind after a job loss, divorce or serious illness. In the current downturn, foreclosures are higher than in previous cycles because more homeowners reached beyond their means to buy their homes and simply can't keep up the payments. As a result, the Boston economists project that up to 8% of underwater Massachusetts homeowners could lose their homes between now and 2010 -- a significant amount, but still not catastrophic.
So what does this all mean for you?
If you have a low-interest fixed-rate loan, you have a valuable asset that might be hard to replace in the current market, no matter what your home's value is. Keeping that mortgage current has some value, even if it means cutting other household expenses.
In addition, the penalties for defaulting are great. In most cases, walking away from a mortgage can knock a top credit score down to the cellar, says Ethan Dornhelm, a senior scientist at Fair Isaac Corp., which sells credit-scoring formulas to credit bureaus.
A person with a stellar credit score from the high 700s to the top score of 850 would see it drop more than 200 points. A person whose credit score is lower may see it fall by fewer points, but still end up with a score in the mid 500s. At that level, reasonably priced new debt, from credit cards to car loans, will be out of reach. In addition, a default could lead landlords and utilities to require more cash up front and even affect your job prospects.
If the borrower continues to pay other debts on time, the score will climb gradually, though it may take three to five years to return to "good" scores, from the mid-600s and up. Scores of 790 or more -- which are rewarded with the lowest interest rates -- won't be attainable for at least seven years, when the default blemish finally disappears, Mr. Dornhelm says.
Fannie Mae requires borrowers who have lost their homes to foreclosure to wait five years before it will accept a loan from them, though borrowers who had extenuating circumstances, such as an illness or job loss, may requalify within three years.
What's more, lenders in most states can go after homeowners for an unpaid balance on a mortgage. That's a real risk, especially if you have other assets.
The longer you stay in your house, the better the chances of making it through this down cycle. Though a return to peak prices may take five or 10 years, some housing markets may start to bounce back once credit becomes more available. Meanwhile, you'll be reducing your mortgage as you make your payments.
Lenders aren't going to renegotiate just because prices have fallen, but if you truly can't afford your payments, contact your mortgage servicer to see if you can rework your interest rate or work out new payment options. The federal Hope for Homeowners program, which began Oct. 1, is intended to provide some relief if lenders will agree to reduce the loan amount to 90% of the home's current value.
If you can't get help from your lender, try contacting a credit counselor certified by the Department of Housing and Urban Development. These counselors have direct access to lenders' loss-mitigation departments, which consumers don't, says Natalie Lohrenz, counseling administrator for Consumer Credit Counseling Service of Orange County, Calif. A list of HUD-certified counselors is available through Hope Now, a consortium of lenders and counselors. (Call 888-995-HOPE or go to www.hopenow.com.)
If you need to sell the property and can't afford to cover the shortfall, your lender may agree to a "short sale," in which you sell at a price below the mortgage amount. This is a much more complicated transaction to pull off than a regular home sale, though, and it may hurt your credit score if the lender reports that you failed to pay off the whole obligation.
Tuesday, July 28, 2009
Latest Home Price Index by Metro Area
July 28, 2009, A Look at Case-Shiller Numbers, by Metro Area (July 2009 update).The S&P/Case-Shiller home-price indexes, a closely watched gauge of U.S. home prices, posted their first month-to-month increase in nearly three years in May, but annual weakness continued.
In the 20-city index, no area experienced year-over-year price gains, the fourteenth straight month that has happened. Boston, Cleveland, Dallas and Denver were the only areas with annual declines under 10%. Every other metro area was in double digits.
However, 15 cities managed to avoid month-to-month declines, up from nine last month. Prices in Tampa and New York were flat, while just Los Angeles, Seattle, Miami, Phoenix and Las Vegas posted monthly declines.
Las Vegas and Phoenix continued to posted the largest monthly and annual declines. Phoenix is down 55% from its peak in June 2006, while Las Vegas is off 53% from its highest level. On the positive side, Dallas and Denver have reported three consecutive months of positive returns.
Ian Shepherdson of High Frequency Economics notes that the nose-dive in home prices that followed the collapse of Lehman Brothers and the intensifying credit crisis has begun to stabilize. “The plunge in prices reflected the freezing of credit and all-round panic, which generated a step decline in home sales. Activity is now recovering, and with inventory falling, prices are dropping much less quickly and could even rise a bit over the next few months.”
Wells Fargo’s John Silvia says the month-to-month pattern is more important than the steep annual declines. “Once again TV commentators that emphasize the year-over-year numbers being down 17% are welcome to have their sarcasm but they are missing the point as well as the turn,” he said. “Recession is over, economy is recovering — let’s look forward and stop the backward looking focus.”
But Shepherdson says that while the plunge has stopped, sustained increases in home prices aren’t likely in the cards. “We would not expect any gains to last, because prices are still high relative to incomes and rents, and also because the uptick in sales will, we think, prompt a new wave of supply,” he said. “But this is still very welcome news today.”
See the full S&P/Case-Shiller report.
Read full story: Home Prices Drop at Slower Pace
Below, see data from the 20 metro areas Case-Shiller tracks, sortable by name, level, and year-over-year change — just click the column headers to re-sort.
(About the numbers: The Case Shiller indices have a base value of 100 in January 2000. So a current index value of 150 translates to a 50% appreciation rate since January 2000 for a typical home located within the metro market.)
Home Prices, by Metro Area
Metro Area May 2009 Change from April Year-over-year change
Atlanta 105.69 0.3% -15.0%
Boston 148.77 1.6% -7.2%
Charlotte 119.8 0.9% -10.0%
Chicago 123.68 1.1% -17.5%
Cleveland 102.11 4.1% -6.2%
Dallas 116.54 1.9% -4.1%
Denver 123.78 1.3% -4.6%
Detroit 70.05 0.2% -24.5%
Las Vegas 109.49 -2.6% -32.0%
Los Angeles 159.18 -0.1% -19.8%
Miami 144.59 -0.8% -25.2%
Minneapolis 109.77 1.2% -21.7%
New York 170.51 0.0% -12.2%
Phoenix 103.56 -0.9% -34.2%
Portland 146.97 0.1% -16.3%
San Diego 145.06 0.4% -18.5%
San Francisco 120.16 1.4% -26.1%
Seattle 148.96 -0.3% -16.6%
Tampa 140.35 0.0% -20.8%
Washington 169.49 1.3% -14.9%
Source: Standard & Poor’s and FiservData
In the 20-city index, no area experienced year-over-year price gains, the fourteenth straight month that has happened. Boston, Cleveland, Dallas and Denver were the only areas with annual declines under 10%. Every other metro area was in double digits.
However, 15 cities managed to avoid month-to-month declines, up from nine last month. Prices in Tampa and New York were flat, while just Los Angeles, Seattle, Miami, Phoenix and Las Vegas posted monthly declines.
Las Vegas and Phoenix continued to posted the largest monthly and annual declines. Phoenix is down 55% from its peak in June 2006, while Las Vegas is off 53% from its highest level. On the positive side, Dallas and Denver have reported three consecutive months of positive returns.
Ian Shepherdson of High Frequency Economics notes that the nose-dive in home prices that followed the collapse of Lehman Brothers and the intensifying credit crisis has begun to stabilize. “The plunge in prices reflected the freezing of credit and all-round panic, which generated a step decline in home sales. Activity is now recovering, and with inventory falling, prices are dropping much less quickly and could even rise a bit over the next few months.”
Wells Fargo’s John Silvia says the month-to-month pattern is more important than the steep annual declines. “Once again TV commentators that emphasize the year-over-year numbers being down 17% are welcome to have their sarcasm but they are missing the point as well as the turn,” he said. “Recession is over, economy is recovering — let’s look forward and stop the backward looking focus.”
But Shepherdson says that while the plunge has stopped, sustained increases in home prices aren’t likely in the cards. “We would not expect any gains to last, because prices are still high relative to incomes and rents, and also because the uptick in sales will, we think, prompt a new wave of supply,” he said. “But this is still very welcome news today.”
See the full S&P/Case-Shiller report.
Read full story: Home Prices Drop at Slower Pace
Below, see data from the 20 metro areas Case-Shiller tracks, sortable by name, level, and year-over-year change — just click the column headers to re-sort.
(About the numbers: The Case Shiller indices have a base value of 100 in January 2000. So a current index value of 150 translates to a 50% appreciation rate since January 2000 for a typical home located within the metro market.)
Home Prices, by Metro Area
Metro Area May 2009 Change from April Year-over-year change
Atlanta 105.69 0.3% -15.0%
Boston 148.77 1.6% -7.2%
Charlotte 119.8 0.9% -10.0%
Chicago 123.68 1.1% -17.5%
Cleveland 102.11 4.1% -6.2%
Dallas 116.54 1.9% -4.1%
Denver 123.78 1.3% -4.6%
Detroit 70.05 0.2% -24.5%
Las Vegas 109.49 -2.6% -32.0%
Los Angeles 159.18 -0.1% -19.8%
Miami 144.59 -0.8% -25.2%
Minneapolis 109.77 1.2% -21.7%
New York 170.51 0.0% -12.2%
Phoenix 103.56 -0.9% -34.2%
Portland 146.97 0.1% -16.3%
San Diego 145.06 0.4% -18.5%
San Francisco 120.16 1.4% -26.1%
Seattle 148.96 -0.3% -16.6%
Tampa 140.35 0.0% -20.8%
Washington 169.49 1.3% -14.9%
Source: Standard & Poor’s and FiservData
Monday, July 27, 2009
California Home Sales a Mixed Bag
Wall Street Journal article:
In California, San Diego and Sacramento both have become much more affordable, she says. Ms. Kahn also thinks prospects are relatively good in Denver; Raleigh, N.C.; San Jose, Calif.; and the Texas cities of Austin and San Antonio—areas that generally avoided the housing bubble and so don’t have as much need to adjust.
Thomas Lawler, an independent housing economist in Leesburg, Va., says areas that seem to be nearing stability include San Diego, Sacramento, Minneapolis, Boston and the Virginia suburbs of Washington.
Among metro areas that “still have a long road to recovery” are Detroit, Phoenix, Las Vegas, Miami-Fort Lauderdale and Chicago, says Ms. Kahn. Mr. Lawler includes New York, Seattle and Portland, among others, in this category. Problems in these areas include high unemployment and large numbers of vacant homes.
Of course, there are lots of variations within metro areas. The most appealing neighborhoods, offering short commutes and good schools, may vastly outperform marginal areas that thrived during the boom.
The job market outlook is a major wild card for those seeking to divine the direction of house prices. Looking ahead one year, Moody’s Economy.com sees the metro areas of Washington, Minneapolis, Houston and Dallas among those likely to have unemployment rates below the national average. Those expected to be above the national average include Detroit, Las Vegas, Los Angeles, Miami, Orlando, Sacramento and Portland, Ore.
Unemployment may be the most important factor in assessing a metro area’s housing-market prospects, says Mark Zandi, chief economist at Moody’s Economy.com. “If people don’t have jobs or fear losing their jobs ,then buying homes is out of the question,” he says.
In California, San Diego and Sacramento both have become much more affordable, she says. Ms. Kahn also thinks prospects are relatively good in Denver; Raleigh, N.C.; San Jose, Calif.; and the Texas cities of Austin and San Antonio—areas that generally avoided the housing bubble and so don’t have as much need to adjust.
Thomas Lawler, an independent housing economist in Leesburg, Va., says areas that seem to be nearing stability include San Diego, Sacramento, Minneapolis, Boston and the Virginia suburbs of Washington.
Among metro areas that “still have a long road to recovery” are Detroit, Phoenix, Las Vegas, Miami-Fort Lauderdale and Chicago, says Ms. Kahn. Mr. Lawler includes New York, Seattle and Portland, among others, in this category. Problems in these areas include high unemployment and large numbers of vacant homes.
Of course, there are lots of variations within metro areas. The most appealing neighborhoods, offering short commutes and good schools, may vastly outperform marginal areas that thrived during the boom.
The job market outlook is a major wild card for those seeking to divine the direction of house prices. Looking ahead one year, Moody’s Economy.com sees the metro areas of Washington, Minneapolis, Houston and Dallas among those likely to have unemployment rates below the national average. Those expected to be above the national average include Detroit, Las Vegas, Los Angeles, Miami, Orlando, Sacramento and Portland, Ore.
Unemployment may be the most important factor in assessing a metro area’s housing-market prospects, says Mark Zandi, chief economist at Moody’s Economy.com. “If people don’t have jobs or fear losing their jobs ,then buying homes is out of the question,” he says.
Tuesday, July 14, 2009
FHA plan will stimulate new home sales and help stabilize housing market
DONOVAN ANNOUNCES RECOVERY ACT'S HOMEBUYER TAX CREDIT CAN IMMEDIATELY HELP THOUSANDS OF FIRST-TIME HOMEBUYERS TO BUY A HOME
FHA plan will stimulate new home sales and help stabilize housing market
WASHINGTON - Speaking to the National Association of Home Builders Spring Board of Directors Meeting, U.S. Housing and Urban Development Secretary Shaun Donovan today announced that the Federal Housing Administration (FHA) will allow homebuyers to apply the Obama Administration's new $8,000 first-time homebuyer tax credit toward the purchase costs of a FHA-insured home. Donovan said that today's action will help stabilize the nation's housing market by stimulating home sales across the country.
The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. Today's announcement details FHA's rules allowing state Housing Finance Agencies and certain non-profits to 'monetize" up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate. To read the FHA's new mortgagee letter, visit HUD's website.
FHA plan will stimulate new home sales and help stabilize housing market
WASHINGTON - Speaking to the National Association of Home Builders Spring Board of Directors Meeting, U.S. Housing and Urban Development Secretary Shaun Donovan today announced that the Federal Housing Administration (FHA) will allow homebuyers to apply the Obama Administration's new $8,000 first-time homebuyer tax credit toward the purchase costs of a FHA-insured home. Donovan said that today's action will help stabilize the nation's housing market by stimulating home sales across the country.
The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. Today's announcement details FHA's rules allowing state Housing Finance Agencies and certain non-profits to 'monetize" up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate. To read the FHA's new mortgagee letter, visit HUD's website.
Thursday, July 9, 2009
CAP AND TRADE WILL DESTROY REAL ESTATE OWNERSHIP
Cap and Trade will destroy real estate ownership.
Among other provisions that control nearly every aspect of our lives, the Waxman-Markley energy bill has a requirement that forces the entire United States to use a National Building Code based on the green building standards of California. Regardless of whether your house is in Miami, Florida or Bangor, Maine, you'll have to adhere to the standards used in a state that has one of the most moderate climates in the U.S. The construction industry is really going to suffer.
The bill forces sellers to have an energy inspection prior to being able to sell their home. Windows, appliances and insulation will have to be inspected and approved by a government inspector and modifications would have to be made for compliance before you can close the sale.
Basically, you won't be able to sell until you go through the expense of bringing your house up to the new code. This will cost a prohibitive amount in many cases. For example, let's say that you own an older house which you bought in 2003 for $250,000 and you now need to sell. Not only has the value fallen to or below the level of the mortgage due the the drop in prices, but you are now faced with re-insulating the entire house, installing new windows, and changing the HVAC & other appliances. The total cost for this type of renovation might easily come to well over 10% of the house's value.
It begins to look as if defaulting on the mortgage might become even more common. The real tradegy is that low income families are more likely to live in older houses which won't meet the new standards and which will require major upgrades. I thought that we weren't going to see any new taxes on people who make less than $250,000. What a cruel joke!
If you want to sell, you'd better do it now, just in case the administration is successful and gets the bill passed by the Senate. Of course, this means that housing inventory will go up and prices will necessarily go down just at the time that interest rates are predicted to go up. Oh, wait! Isn't this just going to add to the housing crisis? I don't know, maybe it's just me...
The bill even mandates that all energy efficiency evaluations of one particular type must be performed by one single company, regardless of where in the U.S. the house is located. Wow! I'd sure like to own that company. I wonder who does?
To further compound the irony, the EPA has now released a new study which states that the average temperature of the Earth is in decline. It seems that this data has been available for some time, but is only now being released. Hmmm!
Woops! Since I wrote this, the EPA has suppressed the study again. I guess it was an inconvenient time.
Of course, this bill has to pass the Senate and then go to the reconciliation committee before it goes to the President to be signed into law. The White House is deviously trying to push off the Senate's consideration of the bill until sometime in September after they have voted on the horrendous, healthcare-rationing bill. By then, I expect that they think that the average citizen will have forgotten all about what Cap and Trade is going to do. The only good thing about this delay is that there's time to let your Senators know what you think about this massive bill which will make all aspects of our lives far more expensive and destroy American industry and competitiveness.
Among other provisions that control nearly every aspect of our lives, the Waxman-Markley energy bill has a requirement that forces the entire United States to use a National Building Code based on the green building standards of California. Regardless of whether your house is in Miami, Florida or Bangor, Maine, you'll have to adhere to the standards used in a state that has one of the most moderate climates in the U.S. The construction industry is really going to suffer.
The bill forces sellers to have an energy inspection prior to being able to sell their home. Windows, appliances and insulation will have to be inspected and approved by a government inspector and modifications would have to be made for compliance before you can close the sale.
Basically, you won't be able to sell until you go through the expense of bringing your house up to the new code. This will cost a prohibitive amount in many cases. For example, let's say that you own an older house which you bought in 2003 for $250,000 and you now need to sell. Not only has the value fallen to or below the level of the mortgage due the the drop in prices, but you are now faced with re-insulating the entire house, installing new windows, and changing the HVAC & other appliances. The total cost for this type of renovation might easily come to well over 10% of the house's value.
It begins to look as if defaulting on the mortgage might become even more common. The real tradegy is that low income families are more likely to live in older houses which won't meet the new standards and which will require major upgrades. I thought that we weren't going to see any new taxes on people who make less than $250,000. What a cruel joke!
If you want to sell, you'd better do it now, just in case the administration is successful and gets the bill passed by the Senate. Of course, this means that housing inventory will go up and prices will necessarily go down just at the time that interest rates are predicted to go up. Oh, wait! Isn't this just going to add to the housing crisis? I don't know, maybe it's just me...
The bill even mandates that all energy efficiency evaluations of one particular type must be performed by one single company, regardless of where in the U.S. the house is located. Wow! I'd sure like to own that company. I wonder who does?
To further compound the irony, the EPA has now released a new study which states that the average temperature of the Earth is in decline. It seems that this data has been available for some time, but is only now being released. Hmmm!
Woops! Since I wrote this, the EPA has suppressed the study again. I guess it was an inconvenient time.
Of course, this bill has to pass the Senate and then go to the reconciliation committee before it goes to the President to be signed into law. The White House is deviously trying to push off the Senate's consideration of the bill until sometime in September after they have voted on the horrendous, healthcare-rationing bill. By then, I expect that they think that the average citizen will have forgotten all about what Cap and Trade is going to do. The only good thing about this delay is that there's time to let your Senators know what you think about this massive bill which will make all aspects of our lives far more expensive and destroy American industry and competitiveness.
Tuesday, July 7, 2009
Revised Stimulus Plan allowing Refi's at 125% of Value
July 1st 125% Refi's were announced!
The government appears to recognize how many Americans are upside down in their homes. However, are we prolonging the inevitable delinquency for borrowers who own more house than they can really afford?
Fannie Mae and Freddie Mac announced they will be allowing borrowers to refi their homes that are underwater up to 125% of current appraised property value.
Previously the cap was at 105% LTV, resulting in President Obama's hyped Home Affordable & Stability Plan being way behind on the estimated number of homeowners it was meant to help.
Whether or not the government should be doing this is up for debate.
The argument against is all for letting the free market work its magic. Get the pain over now and let the economy recover.
Those for government intervention argue that the nation's housing market is "too big to fail". If the government bailed out the "fat cats" on Wall Street, then it should bail out ""Joe Six-Pack" also.
Since we've already started down this slippery slope, it would have been better if they would've done away with the appraisal requirement on refinances all together. A new appraisal hasn't been required on an FHA Streamline refi since 1984. Now with FNMA/FHLMC owned by the government, what's the difference? If it works for FHA, it'll work for FNMA/FHLMC.
Either way, this county's mortgage debt is backed by the government and if payments can be lowered, less homeowners will foreclose. People have to live somewhere.
As a side note, think about what doing away with appraisals on refiances would do to HVCC appraisal issues!
Now, keep in mind that this will take awhile to be implemented as a lot of software needs to be rewritten.
Also, when the government approved the 105% LTV, FNMA & FHLMC both added pricing hits, which offset some of the gains of lower rates. I would hope they don't do the same this time.
Lastly, let's hope FNMA & FHLMC allow more lenders and brokers to do these loans. Right now, FHLMC forces homeowners to only go to their current lender. These lenders are pretty backed up, some taking 60-90 days or more to close these loans causing many homeowners to miss low rate opportunities.
The government appears to recognize how many Americans are upside down in their homes. However, are we prolonging the inevitable delinquency for borrowers who own more house than they can really afford?
Fannie Mae and Freddie Mac announced they will be allowing borrowers to refi their homes that are underwater up to 125% of current appraised property value.
Previously the cap was at 105% LTV, resulting in President Obama's hyped Home Affordable & Stability Plan being way behind on the estimated number of homeowners it was meant to help.
Whether or not the government should be doing this is up for debate.
The argument against is all for letting the free market work its magic. Get the pain over now and let the economy recover.
Those for government intervention argue that the nation's housing market is "too big to fail". If the government bailed out the "fat cats" on Wall Street, then it should bail out ""Joe Six-Pack" also.
Since we've already started down this slippery slope, it would have been better if they would've done away with the appraisal requirement on refinances all together. A new appraisal hasn't been required on an FHA Streamline refi since 1984. Now with FNMA/FHLMC owned by the government, what's the difference? If it works for FHA, it'll work for FNMA/FHLMC.
Either way, this county's mortgage debt is backed by the government and if payments can be lowered, less homeowners will foreclose. People have to live somewhere.
As a side note, think about what doing away with appraisals on refiances would do to HVCC appraisal issues!
Now, keep in mind that this will take awhile to be implemented as a lot of software needs to be rewritten.
Also, when the government approved the 105% LTV, FNMA & FHLMC both added pricing hits, which offset some of the gains of lower rates. I would hope they don't do the same this time.
Lastly, let's hope FNMA & FHLMC allow more lenders and brokers to do these loans. Right now, FHLMC forces homeowners to only go to their current lender. These lenders are pretty backed up, some taking 60-90 days or more to close these loans causing many homeowners to miss low rate opportunities.
Interest Rates are holding but not reaching past low
There is no relevant economic news scheduled for release again today. The weakness in stocks will probably keep bonds from turning sour today. We have seen some improvements in mortgage rates over the past couple of days, but there is question as to whether or not they can hold. It currently appears that they may for the time being, but we know that mortgage rates will rise much quicker than they improve. Accordingly, if still floating an interest rate please be very cautious over the next several days. At least until we get the results of Wednesday's Treasury auction and a couple of the major earnings releases behind us.
Friday, July 3, 2009
The New HVCC Appraisal Law is Killing the Residential Real Estate Recovery Across the Country
HVCC 60 Day Anniversary - We Need Your Help!!
Almost 60 days of HVCC - Are you having fun yet?
Nearly 60 days of HVCC and there seems to be very few success stories. Instead, we hear horror stories how borrowers are being hurt, and the industry is losing loan opportunities while AMCs are making money.
Please take a 20 seconds to visit the following website from the National Association of Mortgage Brokers (NAMB) and voice your concerns.
As an active member of NAMB's affilliate, California Association of Mortgage Brokers (CAMB), I ask you take an active part to call and write your congressmen and senators demanding they suspend HVCC requirement for 18 months, until a more sane and reality based proposition can be reached.
http://www.propertyunitesus.com/index.php?option=com_content&view=article&id=1:welcome&Itemid=28
Almost 60 days of HVCC - Are you having fun yet?
Nearly 60 days of HVCC and there seems to be very few success stories. Instead, we hear horror stories how borrowers are being hurt, and the industry is losing loan opportunities while AMCs are making money.
Please take a 20 seconds to visit the following website from the National Association of Mortgage Brokers (NAMB) and voice your concerns.
As an active member of NAMB's affilliate, California Association of Mortgage Brokers (CAMB), I ask you take an active part to call and write your congressmen and senators demanding they suspend HVCC requirement for 18 months, until a more sane and reality based proposition can be reached.
http://www.propertyunitesus.com/index.php?option=com_content&view=article&id=1:welcome&Itemid=28
Subscribe to:
Posts (Atom)
