The first edition of HARP was a great idea, in theory anyways. [...]]]> With more than 11 million homeowners underwater on their mortgages, 2008’s HARP (Home Affordable Refinance Program) mortgage has been updated to allow more homeowners to refinance their mortgages, taking advantage of today’s historically low interest rates. AKA: HARP 2.0…

The first edition of HARP was a great idea, in theory anyways. If the banks, lenders, and servicers implemented the program exactly as it was written it would have helped many millions of homeowners refinance to lower interest rates, lowering their payments, and even probably had a positive effect on the national housing market and overall economy as less of those homeowners would have lost their homes and had more money in their pockets to spend.

But that’s not how it happened, the banks and servicers applied their own “overlays” to the program’s guidelines, making it hard for many underwater homeowners to qualify. Because of this only about 800,000 homeowners were able to take advantage and lower their rate/payment.

In comes HARP 2.0, with easier guidelines for borrowers to qualify, now unlimited Loan-To-Value ratios are allowed, as well as “Representation & Warrants” requirement waivers, relieving lenders of almost all Reps & Warrants of the original loan, making it much more likely that they participate. The Federal Housing Finance Agency estimates that at least another 1 million homeowners will benefit from a HARP 2.0 refinance before expiration of the program at the end of 2013.

Here are some important facts!

1. The current loan must be backed by Fannie Mae or Freddie Mac. You may not know your loan is backed by either of these entities because you make your payment to someone else (Bank of America or Wells Fargo for example) but in reality they are probably just the servicer of your loan and the security was at some point sold to Fannie/Freddie. I can quickly help you do this search to find out.
2. The current mortgage must have been originated before May 31^st, 2009.
3. HARP loans are available for all occupancy types (primary residence, second home, and investment properties).
4. The mortgage must have not had a 30 day late payment in the past 6 months, and must have had no more than one 30 day late payment in the last year.
5. The current Loan-To-Value ratio must be over 80% (otherwise you may already qualify for a non-HARP refinance)
6. Except for a small exception for some of the earliest HARP refinances in March-May of 2009, those that have previously refinanced under the HARP program will not qualify.
7. Both Fannie and Freddie’s guidelines are nearly the same but Fannie Mae’s are actually a little bit more liberal (which is a good thing as they hold many more HARP-eligible loans than Freddie Mac does).
8. Loan-Level-Price-Adjustments (LLPA’s), fees added on that can increase closing costs, the interest rate, or both (depending on how your lender structured your scenario) have been drastically reduced for HARP 2.0 loans. This was one of the issues with HARP the first time around, LLPA’s would make it very tough to refinance as they would add up to a point that HARP borrowers were no longer eligible for the lowest rates. Under the new program it’s feasible for a HARP borrower to get a lower rate than an non-HARP borrower because of the LLPA cap.
9. Property Inspection Waivers (PIW’s) are the big one here. Under the new rules lenders will be issuing PIW’s allowing the HARP borrower to not have to have an appraisal at all. Not only making a lot of these refinances possible, but saving consumers a few hundred more dollars in the process! PIW’s will not be issued on all refinances, but they will be on many (I can tell you before you shell out $400 for an appraisal if your loan was issued a PIW).

This is great news for homeowners who have made it a point to keep up with their payments! With the updated guidelines rolling out in March eligible homeowners in this category may be able to take advantage of HAPR 2.0 in the very near future. And even if you did miss a payment this program is available through December 2013. If you can get and stay current for the next 6 months, you may be eligible too.

FACT#1: The main fact here is that mortgage servicers will be required to contribute $20 billion to various forms of relief to borrowers. 

FACT #2: Of said $20 billion no less than $10 billion will [...]]]> Some facts about the recent Mortgage Relief agreement between the banks and, well, us…

FACT#1: The main fact here is that mortgage servicers will be required to contribute $20 billion to various forms of relief to borrowers. 

FACT #2: Of said $20 billion no less than $10 billion will be dedicated to reducing homeowner’s mortgage balance that owe more on their mortgages than their homes are worth and are either currently delinquent or at imminent risk of default.

FACT #3: At least another $3 billion will be dedicated to a new refinancing program for borrowers who are current on their mortgages but are underwater. All borrowers who meet some basic eligibility criteria will be eligible for the new refinance program, which will reduce interest rates for borrowers who are currently paying much higher rates or whose adjustable rate loans are due to have their rates increase in the near-term.

FACT #4: The servicers have also agreed to dedicate up to $7 billion in other forms of relief, including forbearance of principal for unemployed borrowers (something already given if your loan is backed by Fannie Mae or Freddie Mac), anti-neighborhood-blight projects, short sale assistance, and special programs for service members who are forced to sell their homes at a loss as a result of a permanent change in station…

FACT #5: As an enticement for servicers to provide relief more quickly, there are incentives for a tangible benefit provided within the first year, on top of that there are additional penalties for any servicer that fails to meet its obligation within three years.

FACT #6: Servicers will receive only partial credit for every dollar spent on some of the required activities, so the settlement will provide direct benefits to borrowers in excess of $20 billion.

FACT #7: In addition to the $20 billion for financial relief for homeowners servicers will make an additional $5 billion in cash payments to the Washington DC and all 50 participating states. That $5 billion will include…

• A Borrower Payment Fund of $1.5 Billion providing cash payment to homeowners whose homes were foreclosed upon from 2008-2011 where the servicers did not follow proper procedures.
• The remaining funds will go to state and federal governments to be used to refund taxpayer dollars lost as a result of servicer misconduct, fund housing counselors and legal aid, and other similar purposes to be determined by each state’s attorneys general. The funds coming to the federal government will mostly go to the FHA Mortgage Insurance Fund, with portions also going to the Veterans Housing Benefit Program Fund and to the Rural Housing Service (USDA).

FACT #8: As part of the deal servicers are agreeing to implement extensive new servicing standards, designed to correct the kinds of conduct that caused a need for this settlement in the first place.

•  Cease past foreclosure abuses such as robo-signing, improper documentation, and lost paperwork through new mortgage servicing standards.
• Require strict oversight of foreclosure processing, including of third-party vendors.
• Impose new standards to ensure the accuracy of information provided in federal bankruptcy court, including pre-filing reviews of certain documents.
• Make foreclosure a last resort, by requiring servicers to evaluate homeowners for other loan mitigation options first.
• Restrict banks from foreclosing while the homeowner is being considered for a loan modification.
• Set procedures and timelines for reviewing loan modification applications, and give homeowners the right to appeal denials.
• Create a single point of contact for borrowers seeking information about their loans and adequate staff to handle calls.

FACT#9: You probably are tired of all these facts! But it’s important to know that Californians are to receive the lion’s share of the relief, $18 billion of the $25 billion!

It was the fifth month in a [...]]]> Home sales in the Sacramento region rose yet again last month, beating the rest of the state (which also rose with us, only not as much). Over 2,400 homes sold across the region in November, up just shy of 12% year over year.

It was the fifth month in a row of over 10% gains in sales volume, with sales in Sacramento County up just shy of 13% in November alone. Placer County, less hardly hit by the downturn had been leading the way in previous months saw homes sale increase by only half a percent. A small bump but a continuing trend upward.

Most of the demand across the board was for moderately priced homes with volume being in the $200,000 and under range. Homes in the $200-300,000 range stayed about the same while sales of homes costing over $300,000 actually slowed a bit.

Foreclosure rates are still higher than we want them to be (I’d like it to be at 0) however you’ll remember in previous posts that the number today is not what matters, it’s actually almost meaningless when it comes to predicting future distressed sales, the number we need to look at is actually how many homeowners are defaulting on their mortgage payments, a number that is dropping more and more every month.

The “news” knows that what sells is fear, scary doom and gloom is what gets the most readers and hits to their website. And, while the picture is not the prettiest, it’s a lot prettier than it was in the not to distant past and much prettier still than the pictures the promoters of fear want to sell you.

In just January of this year that number was closer to [...]]]> At the end of October there were 6.3 million homeowners currently behind on their mortgage in the US. A big number, right? However the data shows that this number has been on a steady decline for the last two years.

In just January of this year that number was closer to 6.9 million. The January before (2010) the number was 8.1 million!

We’ve talked about this before (here are a few links: 3.18.11, 7.29.11, 9.6.11)  but I like to share the real data whenever I can. All we hear in the media is doom and gloom, how there are so many foreclosures and no one can pay their mortgage, etc. As a reminder, the most accurate way to predict foreclosures in the future is people missing payments today. Likewise as less and less people are missing mortgage payments (to the tune of 2 MILLION less in the last two years) the future foreclosure number is going to go down.

We’re seeing the benefits of this already in the Sacramento/Placer markets as housing inventory is at about a 2 month supply. A more “normal” or healthy market has about a 4 month supply of homes at any given time. I’m also seeing the home values of many of my clients, from midtown Sacramento to Roseville, see the values of homes they bought in the last year or so RISE (not a huge rise, but that is better than declining or even being just flat).

This doesn’t mean a reversal of fortune, that people who bought in 2006 are going to see the value of their homes rise to the level it was back then any time soon, but it’s a start.

Bringing you the good news, with real numbers, that you don’t get anywhere else!

Greg Cowart

Some scammers disguise themselves as government agencies [...]]]> The Office of the Special Inspector General for the Troubled Asset Relief Program is waging a strong battle against mortgage and foreclosure rescue scammers that advertise online. The agency recently announced that it halted 85 online scams that promised to help homeowners pursue mortgage loan modifications.

Some scammers disguise themselves as government agencies by using government seals or adopting names that are similar to those of a government agency, the agency revealed. The agency also noted that scammers often ask homeowners for an upfront fee to help them pursue a modification through HAMP.

This is the kind of thing we REALLY need to stop and give those that are guilty the maximum sentence. Preying on those already in a hard place is the lowest of the low.

~Greg

The program has not only relaxed some restrictions on who qualifies but has extended the length of time currently unemployed homeowners can receive [...]]]> The Keep Your Home California program has increased benefits and expanded eligibility in order to help more homeowners having trouble making their mortgage payments keep their homes.

The program has not only relaxed some restrictions on who qualifies but has extended the length of time currently unemployed homeowners can receive assistance on their home loans to 9 months, from 6 (the program is intended to help people stay in their homes if they are temporarily unemployed by subsidizing some or all of their monthly payment for a period of months).

Claudia Cappio, Executive director of the California Housing Finance Agency said, “this expanded eligibility will allow more families to qualify and receive greater assistance.”

Program officials have also increased the cap on the mortgage reinstatement program from $15,000 to $20,000. The reinstatement program provides a one time assistance grant for homeowners that have fallen behind their payments due to financial hardship.

According to the agency Keep Your Home California has already helped more than 7,000 homeowners statewide and has provided more than $128 million in benefits since launching in February. The funds come from $2 billion in 2008 Federal Stimulus money and the state has until 2017 to use it for this purpose or the remainder is returned.

Keep Your Home California’s website: www.keepyourhomecalifornia.org

&

Phone (888) 954.5337.

If you answered anything with a “how long after”, you’re probably right. The question we hear almost every day is asking how long after a foreclosure, short sale, bankruptcy, or deed-in-liu, [...]]]> The big question these days, the one people in my profession get on a near daily basis, what is it? 

If you answered anything with a “how long after”, you’re probably right. The question we hear almost every day is asking how long after a foreclosure, short sale, bankruptcy, or deed-in-liu, etc, can someone be qualified to buy another house, and the question is becoming more common as people with legitimate issues that lost their home or filed BK in 2007-2009 are wanting to take advantage of today’s real estate opportunities and historically low interest rates. The good news is; a lot of them already can. 

The thing is, there isn’t just one answer. There are many answers that depend on factors like; how did one lose their home (foreclosure or short sale, ect), what have they done since then, and what kind of loan are they looking for now? The answers to these questions can make a big difference. I’ll try and break it down and make it as simple as possible for everyone below… 

Conventional

•      2 Years after short sale, pre-foreclosure sale, or deed in liu with a 20% down payment on the new home
•      4 Years after short sale, pre-foreclosure sale, or deed in liu with a 10% down payment on the new home
•      7 Years after foreclosure in most other circumstances
•      4 Years after Bankruptcy, regardless of if it is a Chapter 7 or 13 

FHA 

•      3 Years after Foreclosure (after the actual deed transfer date)
•      3 Years after short sale or pre-foreclosure sale
•      1 Year into a Chapter 13 bankruptcy (there is actually no waiting period after a CH13, only that 12 on-time payments to the trustee have been made, can be verified, and the purchase is approved by the court)
•      2 Years after Chapter 7 bankruptcy has been discharged 

VA 

•      2 Years for all, foreclosure, short sale, or bankruptcy 

(There are a few exceptions to these rules, call me with any specific scenarios)

Of course all of these loans would require reestablishing credit and qualifying for the loan program applied for, these are just the general timelines. Please give me a call if you have any questions… 

Greg
Your Roseville Loan Guy

According to real estate data company RealtyTrac, Notice Of Default (or NOD) filings dropped to 21,721 for [...]]]> Foreclosure activity in the greater Sacramento real estate market is down more than 20% for the first six months of 2011. This closely follows a deep trend in decreasing foreclosure filings around the country…

According to real estate data company RealtyTrac, Notice Of Default (or NOD) filings dropped to 21,721 for the Sacramento market in the first half of the year, from 27,275 for the same period in 2010. RealtyTrac’s CEO, James Saccacio said; “Foreclosure activity continued to slow in the first half of 2011, especially in the most foreclosure-saturated markets.”

If any of you remember me talking about first payment defaults being down in 2009 and 2010 I predicted exactly this. 21,721 foreclosures is still not a pretty picture but the number is still getting better as less homeowners have been going into default on their mortgage payment for the last two years (as compared to the crisis year of 2008 and the first half of 2009). As this trend continues the number of foreclosures will continue to decline as well.

Foreclosure filings are down even more nationwide, decreasing 29.3% across the board. The Roseville/South Placer market is down even more than this (where we’re seeing a real stabilization and a return to a more normal housing market already).

~Greg