08 Nov 11 Home Loan Delinquencies Rise
With mortgage lenders continuing to offer loan modifications and mortgage relief, many industry executives were taken back by the rise in delinquencies. The new refinance program, like the expanded Home Affordable Refinance and the Emergency Homeowners Loan Program, there should be enough options for struggling homeowners. The bad credit mortgage programs have narrowed with FHA new minimum credit score criteria, so this may have played a role in the increased delinquencies.
The rate at which mortgage holders were late with their payments by 60 days or more spiked in the last quarter. According to TransUnion, the delinquency rate increased in the June to September period for the first time since the last three months of 2009. TransUnion said 5.88% of homeowners missed two or more payments, an early sign of possible foreclosure. That was up from 5.82% in the 2nd quarter.
The increase surprised TransUnion researchers, who had expected late payments, or delinquencies, to fall for the quarter. “It’s much different than we’ve been talking about the last few quarters,” said Tim Martin, group vice president of U.S. Housing in TransUnion’s financial services business unit.
The problems were widespread. Between the second and third quarters, all but 10 states and the District of Columbia saw delinquency rates increase. TransUnion’s data is culled from 27 million credit reports, about 10% of U.S. consumers who actively use some form of credit. Martin could not pinpoint one particular reason for the jump. Normally, for instance, housing prices and unemployment have a big influence on delinquency. “Those are both still important, but neither has noticeably deteriorated,” he said. In fact, unemployment was steady during the summer and the Standard & Poor’s and Case-Shiller index showed small improvements in housing prices in most major cities during July and August.
Tags: Home Affordable Refinance
07 Jul 11 Home Loan Relief for Unemployed Borrowers
Nick Timiraos published a recent article on WSJ online that outlines more government mortgage aid that extends support to unemployed borrowers. According to the Wall street Journal, the Obama administration is planning to require mortgage lenders and banks to extend more generous mortgage help for certain unemployed borrowers from losing their homes to foreclosure. New policy changes revealed that mortgage companies that collect payments on loans backed by the Federal Housing Administration will be required to offer 12 months of forbearance for qualified unemployed borrowers.
The foreclosure crisis was initially driven by adjustable rate mortgage loans that were resetting to sharply higher payments, but over the past three years, far more homeowners have faced foreclosure because they have lost their jobs or seen their income fall. Many of those borrowers can’t easily sell their homes if they get in trouble because they owe more than the properties are now worth. Officials said the change was prompted by a slow economic recovery that has seen longer stretches of unemployment than in past downturns. “We’ve been looking for ways we can go farther to help borrowers,” said Mr. Donovan. Around 3,500 borrowers with FHA mortgages fall behind on their payments every month due to unemployment, housing officials said, and around 17,000 borrowers last year had been offered some type of forbearance. HAMP offers a three-month break in loan payments for unemployed borrowers and has helped around 10,000 homeowners since the program began last August.
At a White House town hall event on Wednesday, President Barack Obama conceded that housing has become the “most stubborn” economic problem facing policy makers. “We’ve had to revamp our housing program several times to try to help people stay in their homes and try to start lifting property values up,” he said. The loan relief program won’t apply to loans backed by housing-finance giants Fannie Mae and Freddie Mac, which are under government control but answer to a separate, independent regulator. The firms offer their own forbearance programs and own or guarantee nearly half of all U.S. mortgage liens. The FHA, by contrast, backs less than 10% of all outstanding home loans. See the original WSJ article online.
14 Aug 10 Has Obama Mortgage Relief Gone Too Far?
The Obama administration funded the Home Affordable Refinance Program, Home Affordable Modification Program, Hope for Homeowners and now the Emergency Homeowner Loan Program. Most of these tax-payer funded mortgage-bailout programs failed miserably. However, the Home Affordable Refinance Program,initiatve did help underwater homeowners with 125% mortgage refinancing , but only a small percentage of homeowners met th Fannie Mae and Freddie Mac loan requirements. Rates on fifteen-year loans dropped to 3.92% this week and the thirty-year rates fell to 4.44%. Nationwide reported that economist have forecasted that approximately 20 million homeowners will have an underwater mortgage at some point in 2011. The Fed announced this week they it would use the proceeds from Fannie Mae and Freddie Mac portfolio of mortgage-backed securities to purchase government debt.
FHA refinancing requirements are getting more difficult for the average borrower as HUD is said to be tinkering with a minimum credit score of 500. Lenders are bracing themselves for tighter FHA guidelines in the coming year as HUD moves to rebuild the reserves for the FHA insurance premiums. Read the original article online > Relief for Refinancing with Short Refinance and Emergency Homeowner Loan Programs
11 Aug 10 Emergency Homeowner Loan Program
Word on the finance street is that the Federal government will soon announce the Emergency Homeowner Loan Program. The latest round mortgage bail-outs from the Obama Administration is said to be focused on aiding homeowners who have under-water mortgages.
According to CNNMoney, the Obama administration pledged another $3 billion in additional funds available to assist distressed homeowners in a foreclosure prevention effort. One part of the mortgage bail-out plan, includes a new $1 billion program that will offer self-employed home loans to unemployed borrowers at risk of losing their homes. The mortgage loan relief, which will be dispersed through non-profit and housing agencies, will carry 0% interest and be good for a maximum of $50,000 for up to two years. In the coming weeks, HUD said it will announce details about the new loan relief program, called the Emergency Homeowner Loan Program.
It was not clear whether or not the Emergency Homeowner Loan Program would be part of the recently discussed bail-out for Freddie Mac and Fannie Mae. HUD announced just last week more government loan relief with the FHA short refinance program that was created to help homeowners refinance their under-water mortgages. It also wasn’t clear whether or not the FHA short refinance program would be part of the Emergency Homeowner Loan Program. HUD was unavailable for comment.
Recent Government Mortgage Relief Programs
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The administration also added $2 billion in home loan aid for its mortgage program that helps struggling homeowners in the states with highest unemployment rates. Today, the Obama administration announced an additional $2 billion that will expand the mortgage relief program to a total of 17 states and the nation’s capital. The regions chosen have suffered significant home value depreciation, high unemployment and high foreclosure rates well above than the national average for a year.
Tags: Emergency Homeowner Loan Program, FHA short refinance program, self-employed home loans, under-water mortgages
09 Aug 10 1 in 5 Homes Are Plagued with Underwater Mortgages
Zillow published a mortgage report that revealed that more 1 in 5 U.S. homes have a mortgage that is presently underwater. This is the primary reason that so many lenders are offering loan modification agreements in regions that have seen significant declines in home values. Fewer Americans are strategically defaulting on their mortgage loans, foreclosure rates continue to increase with RealtyTrac reporting a first-quarter foreclosure rate of 1.65 million. Analysts project that the number of mortgage defaults, repossessions and scheduled auctions are likely to reach 3 million by the end of the year. Read the original article online > 20% of US Mortgage Loans Under-Water
06 Aug 10 Government Mortgage Help with FHA Short Refi Program
HUD announced another round of government mortgage help with their new FHA Short Refinance program. Many homeowners are struggling as their home values have declined dramatically in recent years. In fact many borrowers are actually underwater with their mortgage balance greater than their home value. According to HUD, 11.3 million borrowers were underwater with their home loan and most would welcome the government mortgage help. HUD Secretary Shaun Donovan told a group in a recent speech that California, Arizona, Florida, Michigan and Nevada were the states with the most underwater home loans.
The FHA Loan Blog reported that many lending companies who are approved to originate FHA loan products believe that this mortgage relief initiative will help out a lot of struggling homeowners, but the reality is that most borrowers will be unable to meet the FHA loan requirements.
Tags: FHA short refi, Government Mortgage Help, underwater home loans
25 May 10 No 2nd Mortgage Modifications for Obama Loan Relief Efforts
According to the Huffington Post, 11 million homeowners owe more on their home loan than their house is worth, putting them “underwater.” Obama’s 2nd mortgage modification program has failed miserably because after one year and millions of 2nd loan candidates they have not modified even one second mortgage loan. This mortgage relief plan was supposed to reward mortgage servicers to coordinate principal reductions on second mortgage loans when the first mortgage is modified under the administration’s Home Affordable Modification Program.
In today’s upside-down market, homeowners who are stuck with under-water mortgages are seeking principal reductions. Many second mortgage lenders are actually lowering the principal for these borrowers because in many cases it is a better option than taking over the property from a foreclosure or surrender. Loan modification sthat simply lower the interest rate are often not enough for homeowners residing in these heavily depreciated regions like Southern California, Las Vegas and Phoenix, Arizona. According to Citi’s regulatory filings, about 28% of its first mortgages are now worth more than the underlying assets, along with about 42% of their second mortgages. Read the original article > Obama Second Mortgage Loan Modification Plan Failing
Tags: Home Affordable Modification Program, principal reductions, second mortgage loans
