HARP, which allows for underwater home owners with FAnnie Mae or Freddie Mac loans to refinance up to 125th is available today. HARP 2, which allows OVER 125% is the program not available just yet.
Officially, the enhanced HARP 2 program started December 1. Unofficially, most lenders won't be offering it until after March 15th, 2012. Let's explore and understand why?
The original HARP program, which allows a home owner to be underwater on their home mortgage loan up to 125% loan-to-value is available today.
THE BIGGEST DELAY: Simple. Software. When a lender "underwrites" a loan, they actually do so through an AUS, which stands for Automated Underwriting Systems. The computer software evaluates the application, and gives an answer. The underwriter then verifies the computers decision. For example, the software may give a YES answer, then ask for pay stubs to verify income. The underwriters job is to then review the pay stubs to make sure the submitted income is the actual income.
Both Fannie Mae and Freddie Mac need to reprogram their computers, and they've indicated this will become effective March 15th.
BENEFITS TO LENDERS OF AUS: Can a lender "manually" underwrite a file? Sure, but the biggest benefit of submitting a file through the automated systems is all about liability. Contracts with Fannie Mae and Freddie Mac protect a lender against liability for underwriting mistakes made by the lender of the original mortgage if the software said YES. Therefore smart lenders are not likely to take on the additional risk of a manual underwritten file.
THE RULES: Another major issue is simply getting the rules written, and distributed up and down all the lender channels. While Fannie Mae and Freddie Mac have indicated what their rules are, remember that they don't actually lender to consumers. Lenders lend. Fannie Mae and Freddie Mac simply buy loans from lenders. Therefore there is still a large amount of risk to lenders. Each individual lender needs to review new rules, consider the risk, decide if they even want to participate in the enhanced HARP 2 program, then write their rules and push them out to the Loan Officers on the street.
THE BOTTOM LINE: Look for most lenders to start pushing out HARP 2 Refinance rules about the middle of February 2012, but not actually doing them until after March 15th, 2012. Furthermore, expect a huge rush of customer looking to take advantage of the program, creating massive delays with the banks.
All home mortgage interest rates are about to go up due to new hidden tax congress buried into all new mortgage loans.
As part of the deal to extend a temporary reduction in payroll taxes, Congress last month approved a permanent increase in the fees borrowers pay on mortgages backed by Fannie Mae, Freddie Mac and the FHA.
The increase is an annual charge of at least 10 basis points – equal to one-tenth of one percent of the loan amount. That’s equal to an additional $300 a year on a $300,000 mortgage, or an additional $25 a month. The increase is proportional, so a borrower with a $150,000 mortgage would pay another $150 a year, one with a $400,000 loan would pay an additional $400, etc. LOCK NOW
Watch the video from Frank and Brian to learn more, and be sure to COMPLAIN to Washington. Of course this is also a great time to mention the importance of who you select to be President... DO YOUR HOMEWORK!
Top HUD / FHA officials are simply out of touch with what lenders are willing to do. Putting out announcement like this cause significant trouble in the industry.
FHA Extends Waiver of Anti-Flipping Regulations Through 2012.
Minneapolis, MN: In an effort to continue stabilizing home values and improve conditions in communities experiencing high foreclosure activity, the Federal Housing Administration (FHA) will extend FHA’s temporary waiver of the anti-flipping regulations.
With certain exceptions, FHA regulations prohibit insuring a mortgage on a home owned by the seller for less than 90 days. In 2010, FHA temporarily waived this regulation through January 31, 2011, and later extended that waiver through the remainder of 2011. The new extension will permit buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. It will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.
The extension is effective through December 31, 2012, unless otherwise extended or withdrawn by FHA. All other terms of the existing Waiver will remain the same. The waiver contains strict conditions and guidelines to prevent the predatory practice of property flipping, in which properties are quickly resold at inflated prices to unsuspecting borrowers.
Sounds great, BUT too bad it doesn't really matter because of the difficulty in meeting the "strict guidelines" and lender overlays, MOST FHA lenders DO NOT offer this exception.
Remember, FHA does not lend money, lenders do. FHA only insures loans lender make. Regardless of what FHA says they will "allow", it is still up to the individual FHA lenders to decide their ultimate underwriting guidelines. Most FHA lenders find this exception too difficult to meet the strict guidelines, and too risky, so they simply WILL NOT ALLOW any FHA transaction less than 90-days.
While we are talking FHA here, lender overlays also are common on Fannie Mae and Freddie Mac programs.
The Waiver continues to be limited to sales meeting the following conditions:
All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
In all cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the Waiver will only apply if the lender meets specific conditions and documents the justification for the increase in value
CLICK THE SOCIAL MEDIA LINKS ABOVE - SPREAD THE WORD
REGARDLESS OF THE NEW OR OLD GUIDELINES. EVERYONE WHO WISHES TO REFINANCE SHOULD CONTACT A MORTGAGE LENDER TO DISCUSS THEIR AVAILABLE OPTIONS UNDER THE HOME AFFORDABLE REFINANCE PROGRAM.
HARP II – The Home Affordable Refinance Program has released the updated program guidelines.
St Paul, MN: The HARP program, while not perfect, has been one of the few success stories in the governments attempt to help home owners. HARP has helped close to 1,000,000 homeowners refinance, and a few tweaks to the program have just been announced. No one who closely follows the mortgage industry is expecting HARP 2.0 to generate much in the way of additional refinance opportunities in the real world over the existing HARP program – but HARP IS STILL AN AWESOME PROGRAM for those who qualify.
That view seemed to be reinforced after yesterday’s release of the specific program guidance from both Fannie Mae and Freddie Mac to lenders (see links to release below)
It appears the updated HARP programs latest program changes and enhancements aimed at allowing underwater borrowers with Fannie / Freddie mortgages to take advantage of low mortgage rates don’t appear to represent a major departure from the old requirements.
The updated basics are that the loan to value cap has been lifted, certain fees in certain situations have been removed and for borrowers who have loans owned by Fannie or Freddie and who have not been delinquent more than 1 x 30 days in the past twelve months (0 x 30 in the most recent six months) they may find refinancing available to them even if they are underwater on their mortgage to equity ratio.
However, until March 2012 Fannie and Freddie will not even accept delivery of any loan with an LTV > 125%. And, the new loan program continues to be available only to borrowers whose loans are owned by Fannie Mae or Freddie Mac on or before May 31, 2009.
Given the lifting of the Loan-to-Value cap as a major selling point, it appears that since nothing above 125% can be delivered before March this will hamper a program that already has performance characteristics that may make it unavailable to many who could really use the program.
While a handful of lenders who offer HARP already have started to promote HARP refi opportunities, it seems a bit premature as it remains to be seen who lenders will actually implement the new guidelines. Remember, lender overlays play a huge rule in today’s mortgage world. Just because Fannie Mae, Freddie Mac, FHA, VA, or any other program says lenders can, doesn’t mean they will.
View the actual HARP 2 release information in PDF format:
REGARDLESS OF THE NEW OR OLD GUIDELINES. EVERYONE WHO WISHES TO REFINANCE SHOULD CONTACT A MORTGAGE LENDER TO DISCUSS THEIR AVAILABLE OPTIONS UNDER THE HOME AFFORDABLE REFINANCE PROGRAM.
Even if you think you can't refinance, if your first mortgage is up to 105% loan to value, you should contact a mortgage lender to check your options. You may be surprised!
A refinance is just as easy to get as your first mortgage… right?
St Paul, MN: Many people think that refinancing is easier than buying a home for two main reasons:
1) you already have a loan on the home, you make your payments, so it should be easy to refinance. 2) your current mortgage lender already has all their information, so they with easily refinance you, and they are the best place to call **
First, understand that no matter who you call for the refinance – even your existing lender, you have to go through the full underwriting process again. With that said;
- Your financial situation could have changed. Do you have the same job, same income? Better or worse? How about credit. Better or worse? - Mortgage loan Underwriting guidelines have changed. The crazy days of every getting a loan are long gone. Be are back to old school traditional financing guidelines. Did you buy the home on a program that no longer exists… like a no documentation loan? - With all the foreclosures, your properties value probably went down. How does that play into your refinancing options?
Most people refinance for three main reasons.
1) Smaller payment 2) Shorter term 3) Cash out / consolidate debt
The good news is that mortgage rates in MN and WI are amazingly low right now, and lenders are still providing home loans everyday. If you are thinking of refinancing, but have been scared away by thinking you can’t for some of the reasons listed above, you are making a big mistake.
** WORD OF CAUTION: Many people make the mistake of just calling their existing lender. Almost exclusively, EVERY OTHER lender will have a better deal for you. Be sure to call more than just your current company.
Funny, unlicensed bank loan officers always try to claim this isn't important. Your Doctor has a license, your CPA has a license, your Financial Advisor has a license, your Hair Stylist has a license, even your Realtor has a license... So it is OK to use an UNlicensed loan officer --- I think not!
Is your Loan Officer Licensed, or simply registered? There is
a BIG difference YOU need to understand
Recent changes to the lending industry requires all loan officers to
have a tracking number, known as an NMLS number (Nationwide Mortgage Licensing
System and Registry). It should be displayed on their business cards, E-Mail,
web sites, all correspondence, and most loan documents.
The display of the NMLS number may make many believe the Loan Officer is
licensed. Sadly, this isn't true, and working with an unlicensed, untrained
Loan Officer can cause you many headaches and hassles.
Simply put, Loan Officers at Banks, most Credit Unions,
or Mortgage Companies owned by a bank are NOT REQUIRED to be licensed, take
classes, pass any tests, take continuing education, or pass any state or
federally mandated tests to be a Loan Officer!
It is hard to determine if the Loan Officer is simply
registered, versus licensed. When looking up a loan officer, you have to go
to the bottom of their NMLS identification page and look under State
Licenses/Registrations or Federal Registration heading.
A LICENSED Loan Officer will say
"State Licenses/Registrations" and will have one or more STATES
listed with licensing information.
An UNLICENSED, but
simply REGISTERED Loan Officer will say "Federal
Registration" and the something like Federal Mortgage Loan
Originator.
Now I am not trying to make this into a David versus Goliath story, but I am
trying to emphasize the huge differences between Loan Officer training. As the new requirements have
been rolling out across the country, many Loan Officers who have
been unable to meet the new licensing and testing requirements, and especially those who have failed the new tests, have simply gone to the large banks to work.
Calling "1-800-Big-Bank" to get a loan??? YIKES. Here is a chart to show
the differences:
SAFE ACT Loan Officers
(MLO's)
Bank Loan Officers (RMLO's)
Have Personal License
Yes
No
Registered in NMLS
Yes
Yes
FBI Background
Yes
No
Fingerprinted
Yes
No
Surety
Bonded
Yes
No
Pre-Employment education
Yes
No
8 hours continuing
education each year
Yes
No
Personal Credit checked
Yes
No
Pass Tough State Test
Yes
No
Pass Tough Federal Test
Yes
No
Complaint mechanism's
Yes
No
Licensing fees and
renewals
Yes
No
Loan
Officer Designation
MLO
RMLO
NMLS = Nationwide Mortgage
Lender System and Registry (Tracking Number)
MLO = Mortgage Loan Officer (Licensed and Trained)
RMLO = Registered Mortgage Loan Officer (simply registered)
I think
the choice is clear.Who would YOU rather be working with on the
largest financial transaction of your life? A fully trained, licensed,
fingerprinted, and background checked Loan Officer - or the untrained,
unlicensed Loan Officer at the bank?
The funny part is the cost for the service based on rates and
fees are usually about the same, if not slightly cheaper in both rate and costs.
Plus non-bank lenders usually close the loans faster, and have more
knowledgeable and experienced Loan Officers.
The best S.A.F.E. ACT Loan Officer (non-Bank) analogy I can use is having a
choice of working with an experienced CPA to do
your taxes vs. you using Turbo
Tax to do it yourself, but paying the
same price.
Finally, THIS IS A CLEAR REASON why people should follow my
#1 mortgage shopping
rule: GOOGLE THE NAME OF YOUR LOAN OFFICER before allowing them to handle
the largest financial transaction of your life!
Many homeowners are curious about the appraised value of their home. An actual appraisal is expensive, and county tax records do NOT always reflect true market value. As you may be aware, home values are constantly fluctuating, and with the decline in average values, it is important to have an accurate idea of what your home is worth.
There are many sites that claim to give you are idea, including Zillow, Trulia, and more.
The problem is, where is the data coming from and how accurate is it?
We have a different tool to answer the estimated appraised value of your home question. Our application uses the Freddie Mac Home Price Index ( FMHPI ). FMHPI is calculated using a repeat-transactions methodology. Repeat transactions indexes measure price appreciation while holding constant property type and location, by comparing the price of the same property over two or more transactions. The change in price of a given property measures the underlying rate of appreciation because basic factors such as physical location, climate, housing type, etc., are constant between transactions. Averages of appreciation rates for different geographic areas and time periods are calculated using statistical regressions and the index values are derived from these averages
While the estimate may not be the actual or appraised value of your property, it can be a useful tool to gauge fluctuations and trends in your market which affect your home's value.
For best results, contact us. I can help with refinancing your existing MN or WI home, get you pre-approved for a new home, or put you in touch with a GOOD Real Estate Agent to help determine the best asking price for your home. We know the particulars of your neighborhood, the value of homes, and can help you discover what your home may really be worth.
It has been sometime now since these rules have been fully implemented, and the outcome can be evaluated... My opinion? The gap in Loan Officer quality has grown very wide. Those who can not pass muster, but in credit and education have flocked to the banks in droves. Has this helped the consumer?
Does your Loan Officers Credit Score Matter to You? Nationwide Mortgage Licensing System now Checking S.A.F.E Act Loan Officers Credit Reports
St Paul, MN: In reaction to the mortgage market meltdown that exploded onto the market in early 2007, Congress went after what they believed to be a major contributor to the problem, the lack of licensing and standards for Loan Officers.
The result was the S.A.F.E. Act of 2008, which requires pre-employment education, passing a difficult Federal test, passing difficult State tests for each state the Loan Officer is conducting business, yearly continuing education, criminal background checks, and as of Nov 1, 2010, a review of the Loan Officers personal credit report.
While just about everyone would agree that this was a move in the right direction, Congress seriously dropped the ball. The S.A.F.E. Act, only requires non-bank Mortgage Loan Officers and Loan Officers working for Mortgage Brokers to meet the requirements. Loan Officers at big banks, Wells Fargo, US Bank, Chase, Bank of America, and any other Federally Charters Bank ARE NOT REQUIRED to do anything except register their name in the system. This has created a huge gap in knowledge, experience, and Loan Officer quality.
Part of the S.A.F.E Act required a public access web site where consumers can look up their Loan Officer. Follow this link: http://www.nmlsconsumeraccess.org to check out your favorite loan officer.
CREDIT REPORTS are now required as to be submitted into the Nationwide System for State Review. State Regulators will review each non-bank Loan Officers credit report to determine how responsible the Loan Officer is with their personal credit. One can only assume this is under the misguided thought that if the Loan Officer isn't able to handle their own credit, how can they advise you on yours? On the surface, this doesn't sound like a bad requirement, but there are many reasons that good people can end up having bad credit through no fault of their own. Major medical issues, spouse job loss, etc. The exact same factors that could turn YOUR personal good credit bad.
Items under review will include: Bankruptcies, judgments (except medical), tax liens (both state and federal), foreclosures (past three years), general late payments on accounts, collection accounts, outstanding child support, and more. According to the rules, they will not be looking at the actual credit score, but systematically looking at the Loan Officers overall long term financial irresponsibility before they make a final decision on granting a license.
I personally have excellent credit, and have no fear over my credit report, but let's assume a Loan Officer DOES have credit issues? No problem. Just go work for a bank and problem solved. No credit report required.
Joe Metzler is a Certified Minnesota Mortgage Specialist (MMS). His team has over 50-years mortgage lending experience in MN and WI. View his web site at www.JoeMetzler.com. Joe's NMLS # is 274132
33 Wentworth Ave E #290, Saint Paul, MN 55118 Ph: (651) 552-3681 We Beat The Banks Everyday
QRM (Qualified Residential Mortgage) rules set in place by last years Frank/Dodd financial reform law is about to wreck what is left of the housing market and kill any recover. Wtach, learn, and contact your Congressperson before it is too late!
QRM. Three letters that will wreck the housing and economic recovery of this nation. Find out what QRM (Qualified Residential Mortgage) means, and how it is going to effect you. If you want to buy a house with a low, or no down payment option, you might want too act soon!
Washington also wants FHA down payment to be raised to 5%... Watch and learn more.
Thoughts?
Anytime you give something away, you are bound to attract people who don't deserve it, or will try somehow to take advantage of it. In this case, people in PRISON claimed and received the credit!
IRS says First Time Home Buyer Tax Credit Was Abused
The IRS says there was significant abuse and fraudulent claims related to the
$8000 First Time Home Buyers tax credit. Pretty shocking... $29 Billion
went to 4 Million people, with AT LEAST $513 Million in fraud paid out!
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
Many homeowners are curious about the appraised value of their home. An actual appraisal is expensive, and county tax records do NOT always reflect true market value. As you may be aware, home values are constantly fluctuating, and with the decline in average values, it is important to have an accurate idea of what your home is worth.
CREDIT REPORTS are now required as to be submitted into the Nationwide System for State Review. State Regulators will review each non-bank Loan Officers credit report to determine how responsible the Loan Officer is with their personal credit. One can only assume this is under the misguided thought that if the Loan Officer isn't able to handle their own credit, how can they advise you on yours? On the surface, this doesn't sound like a bad requirement, but there are many reasons that good people can end up having bad credit through no fault of their own. Major medical issues, spouse job loss, etc. The exact same factors that could turn YOUR personal good credit bad.
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