Archive for Mortgage Loan Modifications
Home Affordable Refinance Program and 125 Mortgage
Posted by: | CommentsEarlier this year, the government announced several new obama mortgage programs including the Home Affordable Refinance Program that extends refinancing to borrowers with 125 mortgage alternatives. The Home Affordable Refinance loan enables borrowers to qualify for a 125 refinance that enables homeowners to borrow up to 125% of the properties appraised value. This is not to be confused with the 125% home equity loan that borrowers would use for cash out and debt consolidation for credit card debt. The Affordable Home Refinance Program is a rate and term refinance that does not allow cash out or consolidation. Qualifying borrowers must currently have a Fannie Mae or Freddie Mae home loan that does not exceed $417,000. Borrowers need a 620 credit score and only one 30-day late mortgage payment is allowed with compensating factors. This latest obama mortgage may create an opportunity for millions of homeowners to refinance into a low fixed rate mortgage even if the borrower is upside down on their home loan.
Mortgage Loan-Modification Plan Revised for Home Equity Loan Relief
Posted by: | CommentsMany mortgage servicing companies have refused to modify second mortgages and many homeowners have defaulted on their home equity line of credit because their variable rate payments rose beyond their affordability. In a recent article Ruth Simon considers the implications for a new loan modification designed for second mortgage loans. The Obama administration announced new home loan guidelines for its foreclosure-prevention program aimed at offering mortgage relief for borrowers who have a high interest rate equity loan that they have been unable to refinance because of lack of equity or late payments since their second mortgage rate rose after becoming adjustable. Thousands of homeowners tried to qualify for mortgage refinancing that would roll their 1st and 2nd mortgages together into one affordable home loan payment.
The new mortgage loan modification program looked to address a critical component in its efforts to stem the foreclosure crisis. According to Credit Suisse Group nearly 50% of delinquent borrowers have a home equity loan. Many mortgage executives complained to the administration a few months ago because their $75 billion mortgage bailout program had no plans to re-work equity loans in 2nd position. Investors, who include pension funds, insurance companies and hedge funds, say that rewriting the first mortgage without touching the second violates their rights, because second mortgages are supposed to be repaid second. Critics also pointed out that Obama’s first plan had a conflict of interest, because many mortgage loans are serviced by big banks that also hold home equity loans.
Under the revised home equity loan relief plan, mortgage-servicing companies that participate in the loan modification program for second mortgage liens must automatically renegotiate the2nd mortgage when the 1st mortgage was reworked. The US government will share in the cost of reducing the interest rate on second mortgages for five years. As an alternative, it will pay holders of home equity loans to relieve their unpaid debt.
Mortgage-servicing companies that modify second mortgages will receive an upfront payment of $500 and additional payments of $250 a year for up to three years for successful modifications of home-equity loans and other second mortgages. Homeowners who do not fall delinquent on the modified equity loan would receive payments of $250 a year for up to five years that would be used to pay down the balance of their first mortgage. The revised plan also encourages the use of the federal Hope for Homeowners program, which allows borrowers to refinance into a more affordable, government-backed loan, provided the investor who holds the mortgage agrees to a principal write-down.
Mortgage Refinancing Modifications and Obama Home Loans
Posted by: | CommentsFormer Ditech executive, Jeff Morris, says “When the average borrower with a jumbo mortgage can qualify to refinance at a competitive interest rate, I’ll know we have turned the corner.” Morris continued, it’s a mess out there…Many homeowner think that Obama is going to give them 2% fixed rate even if they are 120 days late on their mortgage.” FHA mortgage rates have been low, but not that many borrowers qualify because the credit crunch is still preventing mortgage refinancing and new home loans for many 1st time home buyers. Mortgage loan modification requests are piling up higher than refinance applications.
According to Lawrence Yun, chief economist of the Realtors’ group, the number of home foreclosures may rise to 2.5 million this year and that would be the highest since keeping records of home loan defaults. “The foreclosure wave we’ve been through is not over,” said Susan Wachter, a real estate professor at the University of Pennsylvania’s Wharton School in Philadelphia. “That’s why we don’t see a bottom in housing yet.”
According to Seattle-based real estate data service Zillow.com. About 20.4 million of the 93 million houses, condos and co- ops in the U.S. were worth less than their loans as of March 31st. After the Federal Reserve pledged to acquire as much as $1.25 trillion in mortgage-backed securities to free up money for mortgage loans, mortgage interest rates fell to a record low of 4.78 percent twice in April. Rates began climbing last month on investor concern federal spending will fuel inflation.�
New Affordable Mortgage Refinance Program
Posted by: | CommentsAn important part of Fannie Mae’s role in the Making Home AffordableSM Program is Home Affordable Refinance, available for mortgage refinance transactions of existing Fannie Mae loans only. The goal of the mortgage refinance effort, as announced by the President, is “to provide access to low-cost refinancing for responsible homeowners suffering from falling home prices.” The expectation is that mortgage refinancing a Fannie Mae loan will put responsible borrowers in a better position by reducing their monthly principal and interest payments or moving them from a more risky home loan structure (such as interest-only or short-term ARM) to a more stable product.
Home Affordable Refinance provides two Refi Plus™ options for Fannie Mae lenders to provide Fannie Mae to Fannie Mae refinance solutions to eligible borrowers: 1) Refi Plus, which requires manual underwriting, and 2) DU Refi Plus™ for mortgage loans underwritten through Desktop Underwriter® (DU®). FHA home loans continue to be the most popular method for refinancing adjustable rate mortgages into fixed rate loans.
Conventional & FHA Mortgage Rates Drop
Posted by: | CommentsMortgage loans look good as interest rates dropped again this morning, after the stock markets were lower on Friday. We expect mortgage rates to rise slightly on Tuesday as the financial markets continue to recover on Monday. Mortgage loans continue to be attractive with rates still available at extremely favorable terms right now with A-paper and FHA borrowers people qualifying for 5% or even lower, so if you’ve been waiting to refinance, or waiting to lock your mortgage rate, do it now. When 30-year mortgage rates are lowered this much, you must seize the opportunity and take advantage of the reduced home loan or second mortgage payments that are available only for a limited time.
If you are negotiating a lower rate with your lender on a loan modification and they come back with a proposal featuring fixed interest rates under 5% on your delinquent mortgage, we strongly recommend considering accepting these loan terms. Like mortgage loan modification expert, Jeff Morris said in a recent article, “The low rate loan modifications won’t be around forever.” Morris continued, “With inflation and foreclosure losses, at some point the interest rates will jump significantly.”
The average rates on thirty-year conforming fixed rate mortgages came down to 4.84 % from 4.95 %. FHA mortgage rates dropped to 4.875% from 4.95% the previous week. The FHA home loans remain a popular loan for borrowers looking to purchase or refinance into a lower rate home loan. While jumbo thirty-year fixed rate mortgage loans were only down 0.05% to 6.12% from 6.17%. Fifteen-year conforming fixed rate mortgages came down to 4.55% from 4.62%. The average rate on fifteen-year jumbo mortgage rates was pretty much unchanged at 6.01% from 6.02%.
Average interest rates on a home equity line of credit went unchanged at 4.74%. The average home equity rate difference between a 10-year and fifteen-year home equity loan is still over 3 %. Average rates on ten-year home equity loans were also unchanged at 4.6%. The average rate on a fifteen-year home equity loan was also unchanged at 7.81%.
A record low of 4.78% for a thirty-year fixed-rate mortgage was first recorded on the week of April 2nd and again on the week of April 30th. Freddie Mac’s mortgage rate survey dates back to 1971. Mortgage interest rates fell significantly over the winter. The rates declined again after the Federal Reserve said in March that it would buy $1.2 trillion in mortgage-backed securities and $300 billion in debt, which in most cases impacts rates for 30-year home loans significantly whether refinancing or home buying.
Federal Plan Boosting Refinancing and Mortgage Loan Modifications
Posted by: | CommentsUnder the federal plan, homeowners will be eligible to refinance through Fannie Mae or Freddie Mac as long as their mortgage loan does not exceed 105 % of the current value of their property. A recent analysis from DataQuick shows that more than one-quarter of all homes in the San Diego region are worth less than the borrowers owe on their home loans. In most cases, inland communities in San Diego were hit hard by foreclosures over the last few montha. DataQuick also reported that the ZIP code with the most foreclosures in the county in January was south Chula Vista’s 91911 with 66, which is a 32% increase from the previous year.
Obama Outlines Mortgage Foreclosure Rescue Plan
California posted the nation’s second-highest state foreclosure rate in January, with one in every 173 housing units receiving a foreclosure filing during the month. Such filings were reported on 76,761 California properties, the most of any state despite a 14% decrease from the previous month. The state’s foreclosure activity in January rose 34% from the previous year. Governor Arnold Schwarzenegger recently signed into law a bill that requires loan servicing companies who haven’t already set up mortgage loan modification plans in California to hold off on home foreclosures for at least ninety days.
New Mortgage Loan Bill Explained
Posted by: | CommentsObama Administration launched a 75 billion dollar called “Make Your Home Affordable Plan.” Struggling homeowners may have two home loan options:
1. Mortgage refinancing option that promotes a fixed rate home loan
2. Restructuring their mortgage with a federally backed loan modification.
Borrowers need to be at 105% Loan to Value or Less to qualify for the refinance option. Borrowers need to be able to document income. Must be current on your mortgage and have your mortgage backed by Fannie Mae or Freddie Mac.
With the home affordability mortgage loan modification, the housing payment must exceed 31% of your monthly gross income. Mortgage rates are 2% with 30 or 40 year terms. Principal reductions may be available as well. Maggie Rodriguez spoke to Ray Martin about how to find out if you are eligible for help from President Obama’s mortgage plan.