New fed rules to aid more underwater homeowners
Washington, DC, United States (AHN) – Monday morning the Federal Housing Finance Agency announced new rules that will allow many more “underwater” homeowners, those who owe more than their properties are worth, to refinance at current historical low mortgage rates.
Up to a million borrowers are expected to take advantage of the new program, the FHFA estimates. Originally rolled out in early 2009, the program has fallen far short of the number of people it was expected to help.
Prior to the new rules, only borrowers who owed more than 25 percent more than their homes are worth could participate in the program. The new rules have no cap on how much a borrower owes.
Only mortgages backed by Fannie Mae and Freddie Mac will be eligible under the new rules.
Officials hope the new rules will help the ailing housing market and the flailing economy. By reducing monthly payments, more homeowners will hopefully avoid foreclosure and have more cash to spend, giving a much-needed boost to the depressed economy.
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U.S. banks start to demolish foreclosed properties
Cleveland, OH, United States (AHN) – Some U.S. banks have started to demolish foreclosed properties and are even paying for the cost, which saves the financial institutions from maintenance, taxes and real estate marketing expenses.
In some areas, the properties that were demolished became community parks, church extensions and parking lots.
In Ohio, the company that is charged with razing the foreclosed homes is the Cuyahoga County Land Reutilization Corporation, which was created by a 2009 state law and tasked with creating land banks.
Other states such as New York, Georgia and Philadelphia are using the Ohio model to put up similar organizations.
Lenders and mortgage firms are also donating properties to land banks. Bank of America and Well Fargo said they will donate over 100 properties to land banks. JPMorgan Chase has made regular donations and Fannie Mae donates about 30 properties monthly.
While disposing of unwanted properties on their hands, the banks are also battling lawsuits over securities fraud claims filed by states and municipalities despite the lenders having settled some of the complaints.
Bank of America and JPMorgan are negotiating an agreement with state attorneys general and federal officials that would fund loan modifications for homeowners and set requirements on how the banks should conduct foreclosures.
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Fannie Clarifies Delivery of Repurchased Loans
Fannie Mae issued a bulletin clarifying its policy on loans that have been repurchased. In some cases, the secondary lender will purchase mortgages that have been repurchased by the seller. Among other requirements on such loans, the condition that made the loan ineligible must be cured.
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Issa Seeks to Expand His Mandate
Rep. Darrell Issa (R-CA) “is planning to vastly expand scrutiny of the Obama administration by seeking new subpoena powers for dozens of federal agency watchdogs in hopes of using their investigations and his own in an aggressive push to cut spending and shrink the government,” the New York Times reports. “It is a far broader policy mandate than was embraced by predecessors in both parties, who viewed their role as chief Congressional inquisitor of the executive administration.” His big targets: “40 billion a year in fraud or waste in Medicare; tens of billions of dollars in subsidies to the government-controlled mortgage giants, Fannie Mae and Freddie Mac; $8.5 billion in losses by the Postal Service in the last fiscal year; tens of millions of dollars spent on redundant programs within federal agencies or squandered through corrupt contracting procedures.”
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Secondary Purchases Down at Fannie
During October, new business acquisitions fell 3 percent from September, Fannie Mae reported. Business was up, however, from a year earlier. During the first 10 months of 2010, volume was nearly $700 billion.
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GSE Repurchase Demands Nearing $20 Billion
The acting director of the Federal Housing Finance Agency testified that more than $11 billion in repurchase demands issued by Fannie Mae and Freddie Mac were pending at the end of last year. FHFA regulates the two secondary lenders. In addition, lenders completed repurchases on nearly $9 billion in faulty files.
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The Real First Step to Getting a Great Deal on Your Next Mortgage
photo credit: TheTruthAbout…
In order for you to get your best deal on a mortgage you must first understand the types of companies that are offering mortgage products. Learn how they make their money and half the battle is won! These mortgage companies can be simplified as:
- Brokers
- Broker/Lenders
- Mortgage Lenders
- Banks
Before we continue, I need to stress this single point. There ain’t no free lunch! All companies are in business to make a profit. If your intention is to get someone to work on your loan for free, you will get what you pay for. Read more
