‘Making Home Affordable’ Program Delivers Much-Needed Relief to Homeowners

‘Making Home Affordable’ Program Delivers Much-Needed Relief to Homeowners
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RISMEDIA, May 18, 2009-With the Making Home Affordable (MHA) program delivering much-needed relief to homeowners and to our economy just over two months after the release of program guidelines, Treasury Secretary Tim Geithner and Housing and Urban Development (HUD) Secretary Shaun Donovan provided an update on the program’s impact on stemming the housing crisis and keeping families in their homes and announced new options for homeowners facing foreclosure.

“In just over two months, the Making Home Affordable program is up and running, helping our economy recover and making a difference in the lives and livelihoods of thousands of American homeowners. Historically low interest rates are allowing Americans to refinance and save money, and modifications are helping homeowners avoid foreclosure,” said Secretary Geithner. “We are announcing a new program component to help homeowners obtain modifications in areas suffering from home price declines. If a modification is not possible, we are also announcing steps to encourage the quick private sale or voluntary transfer of property, which will save homeowners money and protect their financial future. These are critical steps in stemming the foreclosure crisis and stabilizing the housing market, both of which are critical to our economic recovery.”

“I can’t stress enough how important our HUD-approved counseling agencies are to the success of the Making Home Affordable program, and ultimately, to helping keep American families in their homes,” Secretary Donovan said. “That’s why HUD has requested a $100 million investment in our Housing Counseling Assistance Program for fiscal year 2010, a $35 million increase from our 2009 budget. This investment will help further support the work of our 2,600 HUD-approved housing counselors across the nation, just like those at NCRC, who play a key role in ensuring that borrowers can take part in the modification and refinancing options made available through Making Home Affordable.”

The new details on the Making Home Affordable program include:

-Foreclosure Alternatives provide incentives for servicers and borrowers to pursue short sales and deeds-in-lieu (DIL) of foreclosure in cases where the borrower is generally eligible for a MHA modification but does not qualify or is unable to complete the process, which helps prevent costly foreclosures and minimizes the damage that foreclosures impose on borrowers, financial institutions and communities. The new details will simplify and streamline the process of pursuing short sales and deeds-in-lieu, which will facilitate the ability of more servicers and borrowers to utilize the program. The program provides a standard process flow, minimum performance timeframes and standard documentation, and it offers financial incentives to servicers and borrowers to pursue these alternatives to foreclosure.

-Home Price Decline Protection Incentives (HPDP) will provide lenders additional incentives for modifications where home price declines have been most severe and lenders fear these declines may persist. To encourage the modification of more mortgages and enable more families to keep their homes, the Administration, building on insights pioneered by Chairman Bair and the FDIC, has developed an innovative payment that provides compensation based on recent home price declines. Together, the incentive payments on all modified homes will help cover the incremental collateral loss on those modifications that do not succeed. HPDP payments will be linked to the rate of recent home price decline in a local housing market, as well as the average cost of a home in that market.

Since the launch of Making Home Affordable, more than one million Americans have now refinanced, due to historically low interest rates, and thousands of underwater borrowers have refinanced under the Home Affordable Refinance Program. Fannie Mae has had over 233,000 eligible refinance applications through its refinancing program, with more than 51,000 of these having loan-to-value ratios between 80% and 105%. More than 55,000 Home Affordable Modification offers have been extended to qualifying borrowers. Additionally, servicers have mailed more than 300,000 letters to homeowners who are potential candidates for the program. The refinance application volumes and modifications underway make clear the desire of homeowners to take advantage of the Administration’s program.

Making Home Affordable, a comprehensive plan to stabilize the U.S. housing market, was first announced by the Administration on February 18. The three part program includes aggressive measures to support low mortgage rates by strengthening confidence in Fannie Mae and Freddie Mac; a Home Affordable Refinance Program, which will provide new access to refinancing for up to 4 to 5 million homeowners; and a Home Affordable Modification Program, which will reduce monthly payments on existing first lien mortgages for up to 3 to 4 million at-risk homeowners. Two weeks later, the Administration published detailed guidelines for the Home Affordable Modification Program and authorized servicers to begin modifications under the plan immediately. Fourteen servicers, including the five largest, have now signed contracts and begun modifications under the program. Between loans covered by these servicers and loans owned or securitized by Fannie Mae or Freddie Mac, Home Affordable Modification participants now account for more than 75% of all loans in the country.

For more information, visit www.financialstability.gov.

Why Live In Texas? This is a Great Video

This video shows the growth and opportunity here in Texas. The stats are real and Texas is not only the perfect place to live but the perfect place to have a job. With times as they are we as real estate agents are seeing more and more out of state home buyers who are relocating to either find new jobs or their actual headquarters moved to Texas. That says a lot. We hope you enjoy this video. Click here if you have any questions.

BEWARE OF LOAN MODIFICATION SCAMS!

LOAN MODIFICATION - The government's failure to help home owners is an open invitation to scam artists to swindle home owners out of what little they have left.

George Souto posted an interesting article about mortgage modification spam by e-mail. Of course, that's not the only venue for companies offering mortgage modification services these days. These scam artists are crawling out of the woodwork.

There are about 15,000,000 home owners at risk of losing their home due to mortgage default. Fannie Mae will not assist a home owner whose mortgage balance is more than 105% of the market value of their home. Let's see. In many counties in many states, property values have dropped by 25-75%.

Case #1. Buyer financed their home purchase in 2005 with 80/20 conventional loan sold to Fannie Mae.

The purchase price was $350,000.
The first trust is about $280,000.
The market value of their home is now about $225,000.
Clearly, the mortgage balance (first trust) is more than 105% of market value. In fact, it's about 120% of market value. This home owner and millions of others are ineligible for loan modification help from Fannie Mae.

I've tried and tried to figure out or find the answer to why this requirement was included in the Fannie Mae Mortgage Modification Plan. It is completely nonsensical since it serves only to exclude millions of home owners in need of mortgage modification.

This isn't the first time Fannie Mae has failed the home buying consumer and home owners.

Case #2. Buyers financed their home in 2006 with an 5% down mortgage sold to Fannie Mae.

The purchase price was $400,000.
The mortgage is $360,000.
The market value of their home is now about $240,000.
Clearly, these buyers will have no relief from Fannie Mae.

ENTER THE MORTGAGE MODIFICATION COMPANY.

"STEP RIGHT UP FOLKS. GET YOUR MORTGAGE MODIFICATION HERE"

We'll talk to your mortgage company. You don't have to.
You don't need good credit!
No mortgage payments until your mortgage is modified!
We can stop foreclosure.
We can perform this magic for you with a modest up front fee of only $1,500 (often one months mortgage payment) to offset our expenses to set up your personal loan modification plan.




Method of payment: cash, cashiers check, check by phone, money order.

In some areas, the "mortgage modification companies" are conducting seminars with fees as high as $2,000 - $3,500 up front. Conducted by "motivational speakers" similar to "self improvement" gurus, the distressed home owners are persuaded that the presenters can solve all of their mortgage problems. These programs are highly organized, well presented and are praying on the naivete of the average home owner who is faced with the loss of their home.

$ $ $ $ TRILLIONS FOR BANKS but MEAGER RESOURCES FOR HOME OWNERS $ $ $ $

THE FEDS TO THE RESCUE?? While the FBI is aware of the problem, with about 2,000 cases under investigation, their report is that they do not have the resources to track, investigate and refer cases for prosecution due to a lack of resources and manpower.

In the mean time, the distressed home owners whose morgage balance is more than 105% of the market value of their home just wait for the money to run out, the registered letter from the mortgage company to arrive.

When they log on to check their e-mail tomorrow morning, they may receive a persuasive spam offering to solve all of their problems and save their home.

Fannie Mae and Freddie Mac Helping More Homeowners - Loan Modifications Increasing

Fannie Mae and Freddie Mac Helping More Homeowners - Loan Modifications Increasing
RISMEDIA, April 17, 2009-Fannie Mae and Freddie Mac modified nearly 24,000 loans during the fourth quarter of 2008, an increase of 76% over the third quarter. The modifications, along with the suspension of foreclosures that began November 26, reduced the number of foreclosures by nearly 27% during the quarter, according to data released by James B. Lockhart, Director of the Federal Housing Finance Agency (FHFA), as part of the Foreclosure Prevention Report for the fourth quarter for 2008.

The FHFA report details the actions Fannie Mae and Freddie Mac have taken to prevent foreclosures and keep people in their homes. It analyzes data provided by the companies with adjustments to account for the impact of the foreclosure suspension. The suspension, originally set to end Jan. 9, 2009, was later extended to Jan. 31, 2009.

“Fewer homeowners are losing their homes as a result of the foreclosure prevention efforts,” said Director Lockhart. “We expect the numbers of those getting relief to grow further as the Making Home Affordable program picks up speed in coming months.”

The foreclosure prevention options include forbearance plans, payment plans, delinquency advances and loan modifications. Workout options that led to resolution of delinquent accounts, which means the account was either reinstated or removed from the portfolio, increased 15% in the last quarter of 2008.

The report shows that as of Dec. 31, 2008, of the Enterprises’ 30.7 million residential mortgages:

• Modifications represented 34.0% of fourth quarter loss mitigation actions up from 22.2% of the third quarter.
• Completed payment plans represented 19.0% of fourth quarter loss mitigation actions compared to 24.2% of the third quarter.
• Short sales represented 8.9% of fourth quarter loss mitigation actions compared to 7.7% of third quarter.
• Deeds in lieu represented 0.8% of fourth quarter loss mitigation actions compared to 0.7% in the third quarter.

As a result of increased loss mitigation efforts and the foreclosure suspensions, the overall loss mitigation performance ratio (loss mitigation actions as a percentage of mortgages for which foreclosure was likely) for mortgages serviced on behalf of Fannie Mae and Freddie Mac, increased from 55% during the third quarter of 2008 to 65.7% in the fourth quarter. For prime loans, the ratio increased from 45.1% to 54.2%, and for nonprime loans from 64.7% in the third quarter to 75.3% in the fourth quarter.

Suspensions gave servicers more time to work with borrowers in foreclosure who were eligible for the Streamlined Modification Program introduced in early November 2008. The impact of the suspensions caused December 2008 numbers for completed foreclosure and third-party sales to decline and for total loans, 60-plus, and 90-plus-days delinquent loans to increase.

When adjusted to account for foreclosure suspensions, the month-over-month change in the delinquency rates decreased. The month-over-month change in the 60-plus-days delinquency rate from October 2008 to November 2008 was an increase of 14.39%. The month-over-month change from November 2008 to December 2008 was an increase of 9.31%.

For more information, visit www.fanniemae.com or www.freddiemac.com.

Using Technology to Your Advantage - Social Networking Connects Agents with Homebuyers

RISMEDIA, April 9, 2009-Facebook, Twitter and YouTube are among the social networking options used by the real estate industry to connect with consumers who are seeking a combination of technology and human touch. The national meeting of the Real Estate Services Providers Council (RESPRO), a national non-profit trade association of real estate broker-owners, real estate franchisers, mortgage lenders, title insurers and agencies, homebuilders, home service and settlement providers united to deliver cost efficient services to consumers through strategic alliances across the home-buying industry, found leaders sharing new strategies to reach “echo-boomers” heavily using computers to research home sales.

Sherry Chris, president and CEO of Better Homes and Gardens Real Estate, said 80% of consumers now use the Internet to research homes and a real estate agent to complete the transaction.

“Tomorrow’s consumer will want to visit sites with as much information as possible.” Chris said. “It will be a combination of the consumer and agent using technology. People are looking for the new opportunity, the new way and help from technology. ”

“[Real estate] companies who [also] have mortgage and title companies are going to be the survivors,” Champion Realty president and CEO Jon Coile said. “The ones who don’t are not.”

For more information, visit http://www.respro.org/.

Someone Finally Speaks The Truth....and its GOOD NEWS!

The other night as I laid in bed watching a little TV prior to falling asleep, I was flipping channels and came across the Dave Ramsey program. He was talking about real estate so my ears perked up and listened. I was so very impressed since he is the only real person with exposure to the general public that was finally speaking the truth about this industry.

I have been so tired of the sky is falling attitude of the media. I totally get that bad news sells, but surely people must be getting tired of this. The truth that Dave Ramsey was saying is that most of the foreclosures are in 35 counties of which most of these are in the following: California, Arizona, Nevada, Florida, Michigan. There is a huge thread about these areas too not just in real estate but with social ideas as well. That I won't go into but the real estate is important. News you won't hear on the national media is that home sales in CA alone are up over 100 percent. WOOO HAAAA but not a word about it.
Second talking point that Dave Ramsey said was that we were going to see over 3 million in foreclosures this year alone. I have said this as well most of the ones that file won't get foreclosed on, their foreclosure will be cleared by a sale of the property, the home owner works something out with their Mortgage Co or they sell with a short sale.

Third talking point that Dave Ramsey said was that according to the Reatlor.org site put out numbers for January 2009 in that month alone there were over 4 million homes sold.

Please note the year and month it is important that you are in the know.

There are over 4 million out of work and funny apparently there is over 2 million jobs available. Sure might not be what you want or you might have to move to the job or whatever but there is work if you want to do what you want.

Ok, so if you have over 3 million in foreclosure in a year that is about 257,000 homes a month going into foreclosure.

Why is this news not getting on the national media----- It does not sell. Americans can't get enough of the Dirty Laundry. We wonder why there is so much anti depressant medication available. What we allow to be feed our brains.

I am not saying not be informed. Make sure the facts are true and look for the whole story. You can't get the whole story in a 30 second clip. Do your research.

I just want to thank Dave Ramsey for standing up to the BS that seems to be spread around on a well fertilized field ready to be planted.

More Good News For Home Buyers

There's a catch to the first-time-home-buyer tax credit already on the books: Those who receive the credit must pay it back over the years to come. But one provision in the stimulus bill approved by the House of Representatives this week would remove that repayment requirement.

The credit gives buyers who haven't owned a home in the past three years up to a $8,000 credit for buying a home before December. Critics of the current tax credit said the repayment feature made the incentive less appealing, and didn't serve its purpose of luring more buyers back into the market.

Tax Credits for Home Improvements

"Rebates available for improvements made during 2009."

On October 3, 2008, former President Bush signed into law the "Emergency Economic Stabilization Act of 2008." This bill extended tax credits for energy efficient home improvements (windows, doors, roofs, insulation, HVAC, and water heaters). Tax credits for these residential products, which had expired at the end of 2007, will now be available for improvements made during 2009. However, improvements made during 2008 are not eligible for a tax credit.

The products covered by the tax credit in 2009 include:
Insulation
Windows (including storm windows)
Skylights
Doors (including patio & sliding glass)
Metal Roofs
Asphalt Roofs
Central Air Conditioners
Air Source Heat Pumps
Geo-thermal Heat pumps
Gas, Oil, or Propane Furnace or Hot Water Boiler
Advanced Main Air Circulating Fans
Gas, Oil or Propane Water Heaters
Electric Heat Pump Water Heaters
Solar Water Heaters
Photovoltaic Systems (solar panels)
Fuel Cells

Products not covered by the tax credit included:

Refrigerators
Dishwashers
Clothes Washers
Room Air Conditioners
Ceiling Fans
Programmable Thermostats

For more information on products covered by the tax credit, visit: www.energystar.gov/taxcredits