AOL Real Estate - Blog http://realestate.aol.com/blog AOL Real Estate - Blog http://realestate.aol.com/blog/media/feedlogo.gif AOL Real Estate - Blog http://realestate.aol.com/blog en-us Copyright 2013 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/Paul Ryan Favors Dissolving Fannie Mae, Freddie Machttp://realestate.aol.com/blog/2012/08/14/paul-ryan-favors-dissolving-fannie-mae-freddie-mac/http://realestate.aol.com/blog/2012/08/14/paul-ryan-favors-dissolving-fannie-mae-freddie-mac/http://realestate.aol.com/blog/2012/08/14/paul-ryan-favors-dissolving-fannie-mae-freddie-mac/#commentsFiled under: ,,

Paul Ryan Fannie Mae Freddie MacBy Jon Prior

A Mitt Romney administration plan for a future housing finance system likely shuns any form of a government guarantee, based on the Republican presidential candidate's choice of Rep. Paul Ryan as a running mate.

The Republican congressman from Wisconsin, who heads the House Budget Committee, released a plan that was passed by the House last year to slash spending across nearly every sector of the government, excluding the military. Ryan's plan has received renewed attention after Romney, the Republicans' presumptive presidential nominee, announced Saturday that Ryan was his pick for vice president. Democrats are looking to target specifics from the Romney campaign while Republicans are hoping to recharge their base.

Romney's selection of Ryan also gives markets much needed insight into how the former governor of Massachusetts would proceed with a long-anticipated reform of the government-sponsored enterprises. The long-term outlook of the Ryan plan involves a complete wind-down of Fannie Mae and Freddie Mac and an end to their bailouts -- which have cost $188 billion so far.

The Ryan budget would "privatize the business of government-owned housing giants, Fannie Mae and Freddie Mac, so they no longer expose taxpayers to trillions of dollars' worth of risk."

Read the rest of this story at HousingWire.

See also:
Freddie Mac Posts $1.2 Billion Net Income in 2nd Quarter
High-End Homeowners Racing to Sell Before Tax Cuts End
Michigan Man Buys County's Entire Foreclosure Stock

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Inside Look: A Presidential Pad

 

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]]>Fannie MaeFreddie MacMitt RomneyPaul RyanHousingWire2012-08-14T16:30:00 00:00Chase Bank Offering No Doc Refis, Principal Reductionhttp://realestate.aol.com/blog/2012/08/08/chase-bank-offering-no-doc-refis-principal-reduction/http://realestate.aol.com/blog/2012/08/08/chase-bank-offering-no-doc-refis-principal-reduction/http://realestate.aol.com/blog/2012/08/08/chase-bank-offering-no-doc-refis-principal-reduction/#commentsBy Jon Prior

JPMorgan Chase went from fast-tracking foreclosures to rubber stamping and pre-approving some borrowers for refinances and even principal reduction.

The five largest mortgage servicers signed a $25 billion deal with federal prosecutors and 49 state attorneys general in March to settle foreclosure abuses and documentation problems in the past. Chase agreed to provide roughly $4.2 billion in relief to homeowners under the agreement, including principal write-downs, modifications and refinances for underwater borrowers.

Servicers receive more credit for granting the relief within one year, according to the terms of the settlement.

But since the foreclosure crisis first struck five years ago, borrowers have grown weary of the documentation black holes at the major banks. Many have spent hours in front of FAX machines, only to be asked for resubmissions or another piece of paperwork.

Read the rest of this story at HousingWire.

See also:
5 Things That Can Derail Your Home Sale
Home Affordability: How Much House (or Apartment) Can I Handle?
Home Costs: 4 Crucial Questions Reveal Hidden Expenses

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]]>ChaseChase Bankmortgage refinancingno doc refinancingno documentationprincipal reductionrefinancingHousingWire2012-08-08T09:00:00 00:00Mortgage Refinancing Activity Reaches 3-Year Highhttp://realestate.aol.com/blog/2012/07/25/mortgage-refinancing-hits-three-year-high/http://realestate.aol.com/blog/2012/07/25/mortgage-refinancing-hits-three-year-high/http://realestate.aol.com/blog/2012/07/25/mortgage-refinancing-hits-three-year-high/#commentsBy Kerri Ann Panchuk

The number of mortgage applications filed in the U.S. edged up a slight 0.9 percent for the week ending July 20 as refinance activity hit a three-year high, an industry trade group said.

The Mortgage Bankers Association noted its refinance index grew 2 percent from the previous week, its highest level since April 2009. Meanwhile, home purchases slowed with the seasonally adjusted purchase index falling 3 percent from the previous week.

Refinance activity made up 81 percent of all mortgage applications, a slight increase from 80 percent a week earlier.

In addition, the 30-year, fixed-rate mortgage with a conforming loan balance held steady at 3.74 percent, its lowest rate in history. The 30-year, FRM for jumbo loans grew to 3.99 percent from 3.98 percent, while the 30-year, FRM backed by the FHA fell to 3.52 percent from 3.55 percent.

The 15-year, FRM fell to 3.07 percent from 3.12 percent, and the average contract interest rate for 5/1 ARMs declined to 2.68 percent from 2.71 percent.

See also:
Barbara Corcoran on Refinancing Do's and Don'ts
Despite Record Low Rates, Refinancing May Not Be Best Bet

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]]>mortgage applicationsMortgage Bankers Associatonmortgage refinancingHousingWire2012-07-25T11:30:00 00:00Homebuilder Confidence Posts Largest 1-Month Jump in a Decadehttp://realestate.aol.com/blog/2012/07/17/homebuilder-confidence-posts-largest-one-month-jump-in-a-decade/http://realestate.aol.com/blog/2012/07/17/homebuilder-confidence-posts-largest-one-month-jump-in-a-decade/http://realestate.aol.com/blog/2012/07/17/homebuilder-confidence-posts-largest-one-month-jump-in-a-decade/#commentsBy Kerri Ann Panchuk

Homebuilder confidence rose six points in July, its steepest one-month increase in over a decade, according to a new report from the National Association of Home Builders.

The NAHB released the Housing Market Index that it compiled in tandem with Wells Fargo on Tuesday. The report shows the Home Price Index reaching its highest point since March 2007.

The key housing market index gained six points in July, increasing to 35. This is the largest one-month gain recorded by the index in nearly a decade, and brings the HMI to its highest point since March of 2007.

The index evaluates builders' perception of strength when it comes to single-family home sales in the United States.

Read the rest of this story at HousingWire.

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]]>highest jump in a decadeHMIhomebuilder confidenceHousing Market IndexNAHBNational Association of Home BuildersHousingWire2012-07-17T13:30:00 00:00Probe: FHLBanks Violated Unsecured Credit Limitshttp://realestate.aol.com/blog/2012/06/28/probe-fhlbanks-violated-unsecured-credit-limits/http://realestate.aol.com/blog/2012/06/28/probe-fhlbanks-violated-unsecured-credit-limits/http://realestate.aol.com/blog/2012/06/28/probe-fhlbanks-violated-unsecured-credit-limits/#commentsBy Justin T. Hilley

Several Federal Home Loan Banks violated regulatory credit limits in 2010 and 2011, even as the risks associated with doing so intensified, according to a recent federal investigation.

The Federal Housing Finance Agency Office of Inspector General found that FHLBanks substantially increased unsecured lending to foreign financial institutions despite indications of heightened risks.

For example, in 2011 one FHLBank extended more than $1 billion in unsecured credit to a European bank despite a downgrade of the bank's credit. That bank later suffered a multibillion-dollar loss.

Read more of this story at HousingWire.

See also:
'This Is Crazy': Company Snatches Condos From Owners
Why Millions May Be Leaving Mortgage Assistance on the Table
Those Mortgages Blamed for Housing Crisis? They're Back

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]]>Federal Home Loan BanksHousingWireunsecured credit limitsviolateHousingWire2012-06-28T14:00:00 00:00HARP Now Expected to Reach Twice as Many Homeownershttp://realestate.aol.com/blog/2012/06/25/harp-architects-expect-to-reach-1-million-more-homeowners/http://realestate.aol.com/blog/2012/06/25/harp-architects-expect-to-reach-1-million-more-homeowners/http://realestate.aol.com/blog/2012/06/25/harp-architects-expect-to-reach-1-million-more-homeowners/#commentsFiled under: ,

By Jon Prior

The expanded Home Affordable Refinance Program will likely reach more underwater borrowers than its architects originally thought.

"We said we would double the number from what we've already done under HARP, which would mean we'd do another 900,000 under the expanded program. I think we're actually trending above that now," said Andrew Bon Salle, head of the Fannie Mae underwriting and pricing group, in an interview.

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The Federal Housing Finance Agency eased HARP eligibility requirements last year for Fannie Mae and Freddie Mac mortgages. It reduced upfront fees, eased buyback risk and eliminated the 125 percent loan-to-value ratio ceiling. Most banks implemented the changes in March.

Read more on this story at HousingWire.

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]]>HARPhome affordable refinance programmortgage aidHousingWire2012-06-25T11:40:00 00:00FHA Lifts Ban on Homebuyers Who Have Credit Disputeshttp://realestate.aol.com/blog/2012/06/18/fha-lifts-ban-on-homebuyers-who-have-credit-disputes/http://realestate.aol.com/blog/2012/06/18/fha-lifts-ban-on-homebuyers-who-have-credit-disputes/http://realestate.aol.com/blog/2012/06/18/fha-lifts-ban-on-homebuyers-who-have-credit-disputes/#commentsBy Jon Prior

The Federal Housing Administration rescinded a rule that would have denied financing to potential homebuyers with ongoing credit disputes of more than $1,000, according to an alert sent to lenders Friday.

The FHA quietly drafted the rule in March to mitigate risks to its emergency fund. The rule went into effect April 1. Borrowers had to either pay off the outstanding balance on collections accounts or document an arrangement to pay before the mortgage was approved.

Industry experts pushed back, particularly homebuilders and lenders with much of their business tied to first-time homebuyers.

Read more on this story at HousingWire.

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]]>Federal Housing AdministrationFHAHousingWire2012-06-18T12:40:00 00:00Mortgage Applications Soar to Highest Level Since Spring 2009http://realestate.aol.com/blog/2012/06/13/mortgage-applications-soar-to-highest-level-since-spring-2009/http://realestate.aol.com/blog/2012/06/13/mortgage-applications-soar-to-highest-level-since-spring-2009/http://realestate.aol.com/blog/2012/06/13/mortgage-applications-soar-to-highest-level-since-spring-2009/#commentsFiled under: ,

mortgage applicationsBy Kerri Panchuk

With interest rates well below 4 percent for the week ending June 8, total mortgage applications soared 18 percent from the previous week, an industry trade group said Tuesday.

The Mortgage Bankers Association noted that the refinance index increased more than 19 percent from the previous week, reaching its highest level since April of 2009. The seasonally adjusted purchase index rose about 13 percent from a week earlier -- reaching its highest level in more than six months.

"Mortgage application volume increased sharply last week," said Michael Fratantoni, MBA's vice president of research and economics. "The increase was accentuated due to the comparison to the week including Memorial Day, but the level of refinance and total market activity is the highest since the spring of 2009."

Read more on this story at HousingWire.

See more on HousingWire:
Bear Stears, Deloitte Settle With Investors for $295 Million
Basel Committee to Determine If U.S. Big Banks Fit International Standards
Wells Fargo to Limit FHA Streamline Participation

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]]>mortgage application volumemortgage applicationsmortgage applications riseMortgage Bankers AssociatonmortgagesHousingWire2012-06-13T11:50:00 00:00Home Prices Up Quarterly and Yearly, Report Sayshttp://realestate.aol.com/blog/2012/06/05/home-prices-up-quarterly-and-yearly-clear-capital/http://realestate.aol.com/blog/2012/06/05/home-prices-up-quarterly-and-yearly-clear-capital/http://realestate.aol.com/blog/2012/06/05/home-prices-up-quarterly-and-yearly-clear-capital/#commentsFiled under: ,,

By Kerri Panchuk

Home prices grew from the previous rolling quarter and year-over-year in May, making it the first time in two years that both indicators have risen in the same period, asset valuation firm Clear Capital said.

The firm published its home data index market report, showing that the West, South and Northeast saw both quarterly and yearly price gains.

Truckee, Calif.-based Clear Capital uses rolling quarters to study home prices. It compares the most recent four months to the previous three months to give users a more timely look at market prices.

Read more on this story at HousingWire.

See more on HousingWire:
Home Prices Edge Upward in April: CoreLogic
RealtyTrac: Short Sales Hit 3-Year High in 1Q
Zillow: Nearly One-Third of Mortgaged Homes Underwater

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]]>clear capital home pricesclear capital priceshome prices risinghome prices upHousingWire2012-06-05T09:58:00 00:003 Bills Could Bring More Mortgage Reliefhttp://realestate.aol.com/blog/2012/05/14/three-bills-could-bring-more-mortgage-relief/http://realestate.aol.com/blog/2012/05/14/three-bills-could-bring-more-mortgage-relief/http://realestate.aol.com/blog/2012/05/14/three-bills-could-bring-more-mortgage-relief/#commentsFiled under:

mortgage reliefThree bills intended to increase homeowner refinancing were introduced this week by Democratic senators -- bills that HUD Secretary Shaun Donovan said are "a win, win, win and something that we think can gain real bipartisan support very quickly and get passed."

The bills, if passed, would complete President Barack Obama's plan for refinancing, which he outlined in the State of the Union Address.

Read the full story on HousingWire.

More on HousingWire:
AG Robo-Signing Settlement Monitor Puts Complaint Forms Online
Robo-Signing Fractures REO Inventory at GSEs
Philadelphia Starts From Scratch to Fix Foreclosures


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Highlights: President Obama's State of the Union Address

 

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]]>mortgage helpmortgage help billsmortgage reliefmortgage relief billsmortgage relief programsrefinance programsrefinancing programHousingWire2012-05-14T11:30:00 00:00Foreclosures Put 8 Million Children At Risk, Study Sayshttp://realestate.aol.com/blog/2012/04/19/foreclosures-put-8-million-children-at-risk-study-says/http://realestate.aol.com/blog/2012/04/19/foreclosures-put-8-million-children-at-risk-study-says/http://realestate.aol.com/blog/2012/04/19/foreclosures-put-8-million-children-at-risk-study-says/#commentsBy Kerri Panchuk

The foreclosure crisis impacted the lives of 8 million American children, and has left them and their parents at increased risk of homelessness and poverty, a Brookings Institution report says.

A study by Brookings scholar Julia Isaacs said 2.3 million children lost homes during the first wave of foreclosures. Another 6 million could face foreclosure in the near future or an eviction from a foreclosed property.

The scope of the tragedy is recognized within the mortgage finance industry. In analyzing the Brookings report, Rick Sharga, executive vice president at Carrington Mortgage Holdings, said there's one major point missing from the study, though.

"It is very likely that those famlies who are being displaced are going to become renters," he said. "The policies they are talking about probably would be helpful, but the problem is we have 97 percent rental occupancy rates nationwide, which makes affordability worse. If you are a distressed family coming off a foreclosure, the last thing you need is escalating rental rates."

Sharga said some investors are already interested in acquiring REO properties and turning them into affordable rental homes.

While children in every U.S. state are feeling the effects of the mortgage crisis, hardest hit states include California and Florida, the Brookings Institution said.

In California alone, more than 500,000 children have gone through a completed foreclosure. Another half million are living in homes where the mortgage is 60 or more days past due.

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First Focus Campaign for Children, a group that promotes the welfare of children, says the foreclosure wave changed the nature of homelessness from a single-adult issue to a family-with-children crisis. The organization outlined policy goals that it believes Congress and the president should adopt to aid families with children.

The nonprofit is asking officials to quickly distribute billions in funds that came to the states as part of the $25 billion national mortgage-servicing settlement between 49 state attorneys general and the nation's five largest mortgage servicers.

"We also urge the newly named independent monitor, who is responsible for overseeing these reforms, to ensure that servicing reforms are implemented quickly to better protect families from losing their homes, or to slow the foreclosure process to allow families more time to find new, permanent housing," the First Focus Campaign for Children said.

The agency also seeks a bill similar to the Permanently Protecting Tenants at Foreclosure Act of 2011 to be passed this year.

The bill, which was proposed last year, aims to extend the PTFA program beyond its current 2014 sunset date by making it permanent.

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The original act, which took effect three years ago, gave renters a minimum 90-day notice before permitting an eviction on tenants living in a foreclosed property. The nonprofit wants another update to the bill to make the 90-day eviction window permanent beyond the 2014 expiration date. The bill also gives tenants a right to pursue court action if their rights were violated through the foreclosure proceeding.

Along with other initiatives related to homelessness prevention, the First Focus Campaign wants Congress to add $1.7 billion more in funds above the president's 2013 budget request for allocation to the U.S. Department of Housing and Urban Development.

"This is the amount needed in order to maintain current levels of assistance for HUD's three largest rental assistance programs for low-income households: the housing choice voucher program (Section 8 vouchers), public housing, and Section 8 project-based rental assistance programs," the First Focus Campaign said. "Currently, families with children make up 42 percent of those served by Section 8 housing choice vouchers, as well as 27 percent of project-based rental assistance, and 35 percent of public housing."

Sharga believes that one of the best solutions would be to move forward with REO-to-rental initiatives that would allow investors to rehabilitate properties in communities, thereby increasing the affordable rental inventory.

See also:
Fair Housing Group Sues U.S. Bank Over Foreclosures
Foreclosure-Review Offer Getting Few Takers, Report Says
How to Avoid Foreclosure: Steps You Can Take to Keep Your Home


Reporter Investigating Foreclosure Fraud Finds He's a Victim

 

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]]>8 million children at homeless risk foreclosureBrookings foreclosure studyBrookings InstitutionBrookings scholar Julia Isaacsforeclosure homeless children studyRick ShargaHousingWire2012-04-19T12:30:00 00:00Fannie Mae, Freddie Mac Prod Banks on Short-Sale Reviewshttp://realestate.aol.com/blog/2012/04/18/fannie-mae-and-freddie-mac-prod-banks-to-speed-short-sale-review/http://realestate.aol.com/blog/2012/04/18/fannie-mae-and-freddie-mac-prod-banks-to-speed-short-sale-review/http://realestate.aol.com/blog/2012/04/18/fannie-mae-and-freddie-mac-prod-banks-to-speed-short-sale-review/#commentsFiled under:

By Jon Prior

Fannie Mae and Freddie Mac will require mortgage servicers to make decisions on short sales under new timelines beginning this June.

Servicers must review and respond to a borrower within 30 days of receiving all documentation. According to guidance released Tuesday, the servicer can take up to 60 days on a decision, if negotiations with mortgage insurers or other stakeholders linger.

Short sales have in the past taken several months to complete as servicers, borrowers, buyers, investors and different lien holders had to agree on a transaction. Mortgage servicers working with the government-sponsored enterprises completed a record 32,000 short sales in the fourth quarter, up 14 percent from the previous quarter, according to agency data.

Under the new guidance, which takes effect June 15, the servicer has three business days to acknowledge the documentation was received, and must notify the borrower within five days if more paperwork is needed.

If a short sale is still under review after 30 days, the servicer must provide weekly status updates to the borrower.

The Federal Housing Finance Agency directed that the GSEs align their short sale guidelines.

"FHFA and the enterprises are committed to enhancing the short sales and deeds-in-lieu process as additional tools to prevent foreclosure, keep homes occupied, and help maintain stable communities," said FHFA Acting Director Edward DeMarco. "These timeline and borrower communication announcements set minimum standards and provide clear expectations regarding these important foreclosure alternatives."

More on HousingWire:
Treasury Asks Servicers to Lobby for Mortgage Debt Relief Act Extension
Servicers Pushed to Act Outside the Technological Box
Citigroup Writes Off Deferred Mortgage Principal Under AG Settlement

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All About Home Short Sales

 

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]]>fanne mae freddie mac short salesfannie mae freddie mac short salefannie mae short salesfreddie mac short salesshort sale deadlineshort sale reviewsshort sale timelineHousingWire2012-04-18T11:15:00 00:00Loan Thaw? Average Mortgage Up by $20,000, Study Sayshttp://realestate.aol.com/blog/2012/04/12/home-loan-thaw-average-mortgage-up-by-20-000-study-says/http://realestate.aol.com/blog/2012/04/12/home-loan-thaw-average-mortgage-up-by-20-000-study-says/http://realestate.aol.com/blog/2012/04/12/home-loan-thaw-average-mortgage-up-by-20-000-study-says/#commentsFiled under: ,

By Kerri Panchuk

The average loan size that lenders issued to borrowers in the past three months grew by $20,000, suggesting a thawing in mortgage lending, Capital Economics said Wednesday.

While the report, which was released by Capital Economics analysts Paul Dales, Paul Diggle and Amna Asaf, stopped short of calling the good news a full lending recovery, Dales said, "it may be an early sign that buyer confidence is improving."

In 2012, the average amount of a mortgage went from around $215,000 to $235,000. The higher loan amounts are not the only positive economic indicator highlighted by the research firm.

Capital Economics reported a 20 percent drop in visible home inventory over the past 18 months, resulting in a situation where a months' supply of unsold homes is now at a level where existing home sales can support current prices. At the same time, Capital Economics believes there are currently 3.9 million homes in the nation's shadow inventory.

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Even though employment numbers fell below the average analyst's expectation of 200,000 new jobs in March, Capital Economics is more optimistic with the current three-month new jobs average sitting at 212,000 positions.

"We are not too alarmed by the 120,000 rise in payroll employment in March, which was exactly half the 240,000 gain in February," Dales wrote. "Just as the unusually mild weather meant that employment grew at a faster rate than the underlying trend in the previous few months, it may now be growing at a slower rate than the underlying trend."

Even though mortgage rates grew slightly in March, Capital Economics said the uptick will have little effect on housing activity since prices still remain affordable and undervalued.

The researchers believes there are signs in the market of a price bottom, but said significant home price gains are not expected in the near term since tighter lending restrictions are prohibiting a boom in real estate activity.

Read more on HousingWire:
Fannie, Freddie and the FHA Lead Surge in Multifamily Lending
Mortgage Applications Fall 2.4% as Purchases, Refinances Decline
RealtyTrac: Foreclosure Filings Fall to 4Q 2007 Level

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How to Shop for a Home Loan

 

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]]>average home loanaverage mortgageaverage mortgage amountaverage mortgage increasesCapital EconomicsCapital Economics housingCapital Economics mortgagesHousingWire2012-04-12T12:02:00 00:00Fannie Mae Poll: More Say Buying a Home Now Is Smarthttp://realestate.aol.com/blog/2012/04/10/consumers-may-prowl-for-homes-in-2012-fannie-mae/http://realestate.aol.com/blog/2012/04/10/consumers-may-prowl-for-homes-in-2012-fannie-mae/http://realestate.aol.com/blog/2012/04/10/consumers-may-prowl-for-homes-in-2012-fannie-mae/#commentsFiled under:

By Kerri Panchuk

A new Fannie Mae study suggests Americans are beginning to consider 2012 a good year to acquire a home.

The government sponsored enterprise released its March National Housing Survey of just over 1,000 Americans and found more citizens expect rents and home prices to increase in the coming months, making today a better time to purchase a residence.

About 73 percent of those interviewed said buying a home today is a good idea, up from 70 percent in February.

Thirty-seven percent of those interviewed believe prices will increase, which is up 5 percentage points since February and the highest point reached in more than a year.

About half of the respondents expect both home rentals and purchases will grow over the next 12 months.

Consumers also are more confident about their own finances, with 44 percent believing their financial situations will get better in the near future.

"Conditions are coming together to encourage people to want to buy homes," said Doug Duncan, vice president and chief economist of Fannie Mae. "Americans' rental price expectations for the next year continue to rise, reaching their record high level for our survey this month. With an increasing share of consumers expecting higher mortgage rates and home prices over the next 12 months, some may feel that renting is becoming more costly and that homeownership is a more compelling housing choice."

Still, 58 percent of those surveyed believe the economy is still on the wrong track, with only 35 percent holding a more optimistic view of the nation's economic situation. Twelve percent believe their financial situation will worsen, and 21 percent believe their income is now significantly higher than it was 12 months ago.

See the original story at HousingWire.

More on HousingWire:
Mortgage Application Filings Jump 4.8%
Apartment Sector Moves From Recovery to Expansion
Trapped: Mobility Among Homeowners Slows

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]]>Doug Duncan Fannie Mae.fannie mae pollgood time buy homehousing markethousing recover outlookMarch National Housing SurveyHousingWire2012-04-10T14:00:00 00:00Mortgage Principal Reduction on Freddie Mac Loans?http://realestate.aol.com/blog/2012/03/26/freddie-mac-principal-reductions-may-be-headed-homeowners-way/http://realestate.aol.com/blog/2012/03/26/freddie-mac-principal-reductions-may-be-headed-homeowners-way/http://realestate.aol.com/blog/2012/03/26/freddie-mac-principal-reductions-may-be-headed-homeowners-way/#commentsFiled under: ,

By Jon Prior

Freddie Mac CEO Charles "Ed" Haldeman gave a strong signal Friday that new incentives from the Treasury Department may be enough to start principal reduction on mortgages backed by the government-sponsored enterprises.

In January, the Treasury said it would triple incentive payments to mortgage investors who allow principal reduction in Home Affordable Modification Program workouts. The payouts ranged between six and 21 cents to the investors for each dollar forgiven under HAMP, but that will grow to between 18 and 63 cents.

"I have to say recently the Treasury sweetened the program and tremendously increased the incentive payments in their offer to us," Haldeman said at HousingWire's REThink Symposium. "We will reevaluate that to see what may be in our economic best interest. If there are very large incentive payments -- which could be 50 percent of what you could write down -- it may be in our economic self-interest to participate in that."

There are currently 11.1 million borrowers who owe more on their mortgage than the house is worth, according to CoreLogic. Of that, estimates show roughly 3.3 million of those mortgages belong to Fannie and Freddie.

The GSEs and their regulator, the Federal Housing Finance Agency, long shunned principal reduction. Their biggest fear is moral hazard -- that borrowers who are still current on their underwater loan would strategically default in order to get principal written down.

"We thought principal reduction could have unintended, secondary consequences on other borrowers seeking the same kind of reduction," Haldeman said.

One previous analysis showed the GSEs would take significant credit losses if a wide-scale program was put in place. A new analysis from the FHFA, which would cover the new HAMP incentives, is expected to be released in the coming weeks.

NPR and ProPublica reported Friday that the analysis will show a reversal, that principal reduction will work for the GSEs under the new version of HAMP.

"As we complete the review, the public should understand that Fannie Mae and Freddie Mac continue to offer a broad array of assistance to troubled borrowers and have continued to implement HARP 2.0 to enhance refinancing opportunities for underwater borrowers," FHFA said in a statement.

Treasury Secretary Timothy Geithner told a House panel this week he and FHFA Acting Director Edward DeMarco were working out their differences.

Haldeman, who announced in October that he would leave his post at Freddie, said the principal reduction verdict will ultimately reside with DeMarco, but he isn't operating on his own.

"At the end of the day, we are in conservatorship, and he is the conservator. But the way it works on a day-to-day basis is that it's a very close collaboration. It is extremely rare that I had a different point of view than Ed DeMarco," Haldeman said.

Read more on HousingWire:
Fannie and Freddie could reverse course on principal reductions
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U.S. Mortgage Rates Rise With Improving Job Market

 

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]]>ed haldemaned haldeman freddie macfannie maefannie mae principal reductionsfreddie macfreddie mac principal reductionsHAMP incentivesHome Affordable Modification Programmortgage principal reductionHousingWire2012-03-26T10:45:00 00:00Buying Cheaper Than Renting in Nearly 100 Major U.S. Marketshttp://realestate.aol.com/blog/2012/03/21/buying-cheaper-than-renting-in-nearly-100-major-u-s-markets/http://realestate.aol.com/blog/2012/03/21/buying-cheaper-than-renting-in-nearly-100-major-u-s-markets/http://realestate.aol.com/blog/2012/03/21/buying-cheaper-than-renting-in-nearly-100-major-u-s-markets/#commentsFiled under: ,,



By Justin T. Hilley

Buying is more affordable than renting in 98 out of the nation's 100 largest metropolitan areas -- even in New York, Los Angeles and Boston, according to real estate company Trulia's rent vs. buy index.

The index is based on asking prices for rental units and homes for sale on the company's website between Dec. 1, 2011, and Feb. 29.

"As rents rise and prices stagnate, homeownership is becoming even more affordable, but rising rents create a dilemma for people who can't afford to buy yet," says Jed Kolko, Trulia's chief economist. "Rising rents make it harder for people to save for a down payment, which is the biggest barrier to buying a home that aspiring homeowners face."

Homeowners are choosing, or being forced, to rent rather than buy even though the latter is cheaper in key markets Trulia reviewed.

But as they turn to renting, the influx of demand squeezes the nation's rental supply, pushing monthly rents higher.

The nation's median rent stands at $712 per month -- well above the average monthly mortgage cost of $647, Paul Dales, senior economist at Capital Economics, recently found. He estimated decreased vacancies in the home-rental market will push average rental rates up as much as 5 percent by early 2013, compared to 2.4 percent in January.

As a consequence of less willingness and ability to buy a home, households in rentals will rise by at least 850,000 a year over the next few years, Dales said.

He expects rents to rise at an annual rate of 3 percent this year and remain at that level in 2013. "Assuming that the economic recovery gains firmer footing, in future years there is scope for rents to rise by around 4 percent a year," Dales said.

Only in Honolulu and San Francisco is renting often a better deal than buying. However, Trulia points out that buying a home in these markets might make sense for people who plan to stay in their next home for at least five years and can benefit from the mortgage-interest tax deduction.

"Metros where homeownership is expensive tend to have stronger long-term economic growth and little room to build new homes, like Boston and the San Francisco Bay Area, where people expect home prices to increase over time," Kolko says.

"Buying is much cheaper than renting in slow-growing places with high vacancy rates and land to spare, like Detroit and Cleveland, where prices are unlikely to improve much in the future," he says.

Top 10 metros in which to buy versus renting, according to Trulia:



Read more on HousingWire:
Existing Home Sales Dip 0.9% in February
Home Prices Expected to Fall 0.7% in 2012
San Franciscon Home Sales Rise 14% in February

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The Pros and Cons of Renting or Buying a Home

 

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]]>buying vs rentingcities cheaper to buy than renthome rental marketJed Kolkomarkets where cheaper to buy than rentPaul Dalesrenting vs buyingTrulia buy rent indexwhere buying is cheaper than rentingHousingWire2012-03-21T12:55:00 00:00Only 5% of Underwater Homes May Qualify for Write-Downshttp://realestate.aol.com/blog/2012/03/05/only-5-of-delinquent-borrowers-may-qualify-for-principal-reduct/http://realestate.aol.com/blog/2012/03/05/only-5-of-delinquent-borrowers-may-qualify-for-principal-reduct/http://realestate.aol.com/blog/2012/03/05/only-5-of-delinquent-borrowers-may-qualify-for-principal-reduct/#commentsFiled under:

mortgage principal reductionOnly about 1 in 20 underwater homeowners may qualify for principal reduction under states' recent settlement with five big banks, a new study says.

A calculation by a Brookings Institution economist narrowed down the pool of underwater homeowners to 500,000 who could qualify for principal reduction from the $25 billion mortgage settlement.

As first reported by The Washington Post, Ted Gayer found that, in using the parameters of the settlement, just 5 percent of the nation's 11.1 million underwater borrowers could get the principal reduced on their mortgage.

About $10 billion of the settlement, in the form of credits, will go toward principal write-downs made by the five banks. Only homeowners delinquent on their mortgages are eligible.

Read the full story at HousingWire.

See also:
Bank Sold Your Loan? Mortgage Settlement May Deal You Out
How the Foreclosure Settlement Could Affect You

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Mortgage Settlement Reached

 

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]]>25 billion mortgage settlementDelinquent Borrowermortgage principal reductionmortgage settlementrobosigning settlementunderwater mortgageunderwater mortgagesHousingWire2012-03-05T10:20:00 00:00FHA Loan Costs to Rise in Aprilhttp://realestate.aol.com/blog/2012/02/28/fha-loan-costs-to-rise-in-april/http://realestate.aol.com/blog/2012/02/28/fha-loan-costs-to-rise-in-april/http://realestate.aol.com/blog/2012/02/28/fha-loan-costs-to-rise-in-april/#commentsFiled under:

FHA loansBy Jon Prior

The Federal Housing Administration will raise mortgage insurance premiums this April in order to repair the health of its emergency fund.

The FHA upfront mortgage insurance premium will increase to 1.75 percent from 1 percent of the base home loan amount. This will apply regardless of the term or loan-to-value ratio beginning in April.

The annual mortgage insurance premium will increase by 10 basis points for loans under the $625,500 limit beginning April 1 and by 35 basis points for home loans above that amount starting in June, the FHA said Monday. Authority for these raises come under the payroll tax cut extension agreed to last fall.

Read the full story on HousingWire.

Also see:
New Home Sales Dip, But Beat Expectations
30-Year Mortgage Rate Up, But Still Under 4%

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]]>Federal Housing AdministrationFHA loansinsurance premiumsmortgage costsmortgage insuranceHousingWire2012-02-28T10:50:00 00:00Bank of America Slams the Door on Fannie Maehttp://realestate.aol.com/blog/2012/02/24/bank-of-america-slams-the-door-on-fannie-mae/http://realestate.aol.com/blog/2012/02/24/bank-of-america-slams-the-door-on-fannie-mae/http://realestate.aol.com/blog/2012/02/24/bank-of-america-slams-the-door-on-fannie-mae/#commentsFiled under:

By Jacob Gaffney

Bank of America is faced with numerous reps and warrants challenges on the mortgage front, and as a result of growing uncertainty, it will no longer sell certain mortgage refinances into Fannie Mae mortgage-backed securities.

"The issue is tied to ongoing disagreements between Bank of America and Fannie Mae in regards to repurchases," said Dan Frahm, spokesman for BofA.

Read the full story on HousingWire.

Also see:
Delinquency Rate Down, Foreclosure Supply Up, Report Says
Home Affordability at Record High, Builders' Report Says

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]]>HousingWire2012-02-24T11:00:00 00:00Chase and Nonprofit to Give Homes to Military Members, Vetshttp://realestate.aol.com/blog/2012/02/21/chase-gives-100-homes-to-servicemen/http://realestate.aol.com/blog/2012/02/21/chase-gives-100-homes-to-servicemen/http://realestate.aol.com/blog/2012/02/21/chase-gives-100-homes-to-servicemen/#commentsFiled under:

By Kerri Panchuk

Mortgage lender Chase and nonprofit Operation Homefront will partner to place 100 wounded warriors, military members and veterans into Chase-owned homes.

Operation Homefront is a nonprofit that provides aid to active military, wounded warriors and veterans.

The new program -- Homes on the Homefront -- will provide transitional services for veterans and families chosen to receive the residences.

Read the full story on HousingWire.

Also see:
CoreLogic Report Shows Sharp Drop in Foreclosures for 2011
Bank of America Plaza to Sell at Foreclosure Auction
Top Turnaround Housing Markets for 2012

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]]>Chase donateChase donate militaryChase homes militaryChase militaryChase Operation HomefrontOperation Homefront donateOperation Homefront militaryHousingWire2012-02-21T10:35:00 00:00