Emergency Foreclosure Program deadline Friday, July 22nd!!!

By
Mortgage and Lending with Fairway Independent Mortgage NMLS #2289 Equal Housing Lender

From the desk of Barb Crea,

 

Will we get a Deficit Reduction Plan and an increase in the Debt Ceiling in time?   This could be an interesting week. 

Red Letters DebtThat is still the big question.  So far, the markets seem to believe that Congress will burn the midnight oil and strike a deal. I hope so and I hope it is one both sides of the aisle can and do embrace.   Time is running out.  The closer we get to the deadline without a deal, the more likely the market is to start pricing in the risk of both a default and a downgrade of US bonds.  Keep your eyes on the rates and the news this week.  Better to be safe than sorry.  According to my Financial Planner, his advisors believe a default or failure to reach a deal on the deficit might result in an immediate .5-1.0% increase in rates and an 8-15% decline in the stock market.

FHA loan limits will likely fall:

FHA Maximum mortgages will automatically revert to $318,550 for loans not closed and insured by October 1, 2011 if Congress does not act to maintain the current high cost limits.  The higher loan limits were put in place several years ago to help stabilize the market.  For the past three years, they have been extended but my sources tell me that there is a strong probability that no extension will be granted this time around.  With prices dropping in the Metro area, there is not much data to support keeping the limits at their current levels. 

I expect that some investors will start enforcing the new loan limits for loans closed earlier than the deadline since FHA does require loans at the higher limits to be insured by Oct 1. Insuring cannot take place until after the loan has closed.  In order to make certain that they have time to resolve any post closing issues, they will mandate a margin of safety by setting the cutoff date earlier than the October 1st deadline.

 Right now, we’re seeing purchase agreements with closing dates in the month of September.  Be aware, that if they are FHA and depending on the higher limits, you may want to move the dates up a bit to insure that the transactions can close.

Emergency Foreclosure Program - Deadline Friday, July 22!  If you know anyone who might benefit, today is the last day.

 Friday, July 22 is the deadline for Minnesota homeowners to apply for up to $50,000 in an interest-free, forgivable loan if they are in danger of foreclosure due to involuntary unemployment, underemployment or medical issues; homeowners must be at least three months behind in their mortgage payment.

 Help get the word out about today’s deadline for the Emergency Homeowners’ Loan Program (EHLP). Pre-applications must be received by the Homeownership Center by 5:00 p.m.on Friday, July 22.Minnesota received a funding allocation of more than $55 million to help 1,405 homeowners keep their homes.

If you have questions about the Emergency Homeowners’ Loan Program or to forward information to your clients, please contact (or have your client contact) the Minnesota Homeownership Centerat (866) 462-6466 or visit www.ehlpminnesota.com to obtain application materials.                                                                          

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