http://www.msnbc.msn.com/id/21134540/vp/45020283#45020283

December 31, 2012 Mortgage Debt Relief Act comes to an end

http://www.irs.gov/individuals/article/0,,id=179414,00.html

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HAFA was launched in April 2010 to provide an incentive to servicers and investors for pursuing short sales and deeds-in-lieu of foreclosure. The program was designed for homeowners who fell out of the Treasury’s Home Affordable Modification Program and was touted as a new standard for short sales.

But both HAFA and HAMP have struggled. The Treasury has spent only $4.3 million through HAFA, inducing roughly 661 short sales since the program launched, according to the Congressional Oversight Panel, the Troubled Asset Relief Program watchdog.

With such low numbers, the Treasury has eliminated rules that have constricted eligibility for HAFA. Among them, servicers are no longer required to verify a borrower’s financial information or determine if the borrower’s total monthly mortgage payment exceeds a 31% debt-to-income ratio. Servicers still must obtain a signed hardship affidavit.

“While this requirement has set the standard for mortgage affordability under HAMP, it is not as important for homeowners ready to transition out of their home,” a Treasury official said. “Eliminating this requirement further streamlines the process for homeowners applying to the program.”

In order to get more second-lien investors to clear short sales, the Treasury changed how servicers pay out to these holders. Before, the second-lien investor had to agree to accept 6% of the unpaid principle balance owed to them, up to $6,000. But the new guidelines eliminate that 6% rule. Now, servicers on behalf of the investors determine the amount or percentage of the unpaid principal balance of the second lien to be paid to each holder.

However, the cap still remains at $6,000.

The Treasury also directed servicers to grant borrowers who request consideration for HAFA the same timeline as those who are approached by the bank. Now, all borrowers must receive a short sale agreement no later than 30 days after request.

The Treasury said it will begin reporting official HAFA numbers in the first quarter of 2011.

If you or someone you know is needing help with their distressed home please contact Josh Groesbeck 208-353-7131 or www.homeswithjosh.com

http://kcmblog.com/2011/06/22/are-short-sales-getting-easier/

As of now the  30-year fixed mortgage rate declined over the weekend, falling to 4.67 percent on Saturday, before climbing to the current rate.

Furthermore, the 15-year fixed mortgage rate on Tuesday morning was 3.98 percent and for 5/1 ARMs, the rate was 3.29 percent.

What are the rates right now? Check out www.homeswithjosh.com or call Whittney Curran at Academy Mortgage 208-489-1356.

Joshua Groesbeck 208-353-7131

Or contact The Department of  Housing and Urban Development

http://portal.hud.gov/portal/page/portal/HUD

Unemployed home owners in five states will be able to get some help from the government with zero-interest, forgivable loans that set out to help them avoid foreclosure.

The $1 billion Emergency Homeowners’ Loan Program — an Obama administration program — was established nearly a year ago but has been delayed several months. The House recently voted to end the unemployment program, but the Democrat-led Senate isn’t expected to approve the measure.

The program will provide unemployed home owners zero-interest loans of up to $50,000 so that they’ll be able to continue making mortgage payments. The loans can be forgiven over five years.

Below are numbers for Bank of America, JP Morgan, Citi Mortgage, Wells Fargo and how they have been doing with HAMP ( Home Made Affordable Program)- Is your lender trying to foreclose on you? Would you like to minimize the damage to your credit and avoid foreclosure?     FREE CONSULTATION AND FREE SERVICE Joshua Groesbeck 208-353-7131 or josh@homeswithjosh.com

As of November 30, 2010, there were an estimated 1,420,048 borrowers eligible for HAMP who are 60 or more days delinquent.

The servicer performance report released Monday by Treasury revealed that as of the final day of 2010 there are a total of 521,630 active permanent modifications and 152,289 active trial modifications.

By contrast there have been 1,025,907 homeowners rejected for HAMP modifications by the eight largest servicers, and there have been 572,655 canceled trial modifications.

To date there have been 1,466,448 HAMP trials started.

The report details numbers reported for several servicers, including the Bank of America (BofA), Citi, JP Morgan Chase, and Wells Fargo. Though the “big four” banks are leading the pack in numbers of modifications, the numbers are quite low over all when contrasted with the 3 to 4 million homeowners HAMP projected to help by 2012.

On top of that, it seems the pace of modifications is slowing dramatically.

Bank of America has the highest number of modifications of all surveyed servicers. The company reported it currently has 45,753 active trial modifications and 90,243 active permanent modifications.



Josh Groesbeck 208-353-7131 or josh@homeswithjosh.com

It’s taken three years to process $1 trillion in foreclosed homes. At that rate, it will take more than five years for the amount of each individual’s mortgage debt, relative to their income, to get back to levels that were the norm in this country before the housing bubble, according to a report from TrimTabs Investment Research.

“For the debt-to-income ratio to return to 65 percent, mortgage debt needs to fall from its current level of $8.9 trillion to $6.4 trillion to $7.4 trillion,” Madeline Schnapp, TrimTabs director of economic research lays out very clearly in a report to clients today. “At the current pace, it could take four to six more years to work through the current and expected backlog of delinquencies.”

Home with foreclosure sign

One problem with this math could be that Schnapp assumes there will be very little income growth because of high unemployment so the only way to get back to normal is to lower the debt side of the equation through foreclosures. However, she’s also assuming 60 to 65 percent is the “sustainable” amount of debt to income an average homeowner can handle and many believe that will still have to come down even further. Either way, you’re left with at least a five-year slog, according to many economists and investors.

“It may take longer than 4-6 years in my opinion to work through the delinquencies,” said Simon Baker, CEO of Baker Avenue Asset Management. He cited the stall in the foreclosure process taking place in the court system as banks are forced to prove they actually own mortgages that changed so many hands during Wall Street’s securitization process.

“Sloppy paperwork and government policies that slow foreclosures and allow banks to postpone losses are only delaying the necessary adjustment in the housing market,” wrote Schnapp in her report. “The faster home prices reach a market clearing level, the faster the housing market will boost the economy.”

The latest Standard & Poor’s/Case-Shiller data showed that housing prices fell again across most of the major cities, with eight markets such as Las Vegas and Miami setting new lows since the housing crisis. Data released today showed a much higher than expected jump in weekly jobless claims, dampening hopes of an increase in wages anytime soon.

“We do not expect a true turn in home sales to occur until it becomes clear that the unemployment rate has peaked and is on a steady downtrend,” said Michelle Meyer, an economist for Bank of America Merrill Lynch, in a report to clients. “In addition, the turn in new home sales should be slower than that of existing homes given the lure of deeply discounted foreclosures.”

Source: John Melloy CNBC

Slowly but surely, home buyers are entering the market again. It’s a trend that will likely continue throughout 2011.

Overall, mortgage applications are down again this week. But this is mainly due to the huge drop in refinance activity, driven by rising rates. On the home buying front, activity was up in November. The housing market is still sluggish by any measure. But the buyers are starting to come out of the woodwork.

According to the National Association of Realtors, home purchases for November increased 5.6 percent over the month prior. Home purchases will likely drop in December, which is a seasonal trend that happens every year. As we move into 2011, home purchases are expected to rise again.

Buying a Home, 2011

In many parts of the U.S., home prices will continue to decline through the first part of 2011. This, along with consistently low mortgage rates, has kept a lot of home buyers on the sidelines for the past few months. But mortgage rates have risen steadily for the last several weeks. If the upward trend of interest rates continues, it will bring more buyers into the market.

“When you have record-low mortgage rates and price declines, home buyers don’t feel any sense of urgency,” said Brandon Cornett, publisher of the Home Buying Institute. “But when the rates start rising, buyers say to themselves ‘Okay, maybe this is as good as it gets … maybe it’s time to take the plunge.’”

Many are predicting that mortgage rates will inch upward through 2011, perhaps reaching or exceeding 5 percent by year’s end. If that prediction holds true, it will give home buyers a stronger sense of urgency.

Source: Brandon Cornett

The Home Buying Institute

Loan servicers will have 30 days to send a borrower a short-sale agreement that includes the list price or acceptable sales proceeds under recent changes made to the Home Affordable Foreclosure Alternatives Program, aimed at distressed borrowers who don’t qualify for other government loan modification programs.

Once a sales contract has been initiated, loan servicers then have 30 days to approve or reject the transaction.

The stricter timelines are believed to help speed up the short sale process, which has faced numerous complaints for how long it takes lenders to review and approve short sales often causing buyers to walk away.

The stricter timelines were apart of several revisions the Treasury Department recently announced to its HAFA program — the second major revision to the program since its launch in 2009.

Another big change: Loan servicers will no longer be restricted on paying second-lien holders, allowing them more freedom particularly when dealing with second-lien holders when borrowers owe less than $100,000. Loan servicers used to be restricted to paying second-lien holders no more than 6 percent of outstanding loan balance (with an overall limit of $6,000) in exchange for releasing subordinate liens. Second-lien holders have been another big obstacle to completing short sale transactions.

HAFA’s new directives also now forbid loan servicers from deducting vendor expenses from commissions paid to real estate brokers.

The rules are effective Feb. 1. It does not apply to mortgages owned or guaranteed by Fannie Mae or Freddie Mac, or insured or guaranteed by a federal agency such as the Federal Housing Administration (FHA).

Source: Daily Real Estate News

The Treasury Department took action in December eliminating some rules it said have held back short sales through the Home Affordable Foreclosure Alternatives program.

HAFA was launched in April 2010 to provide an incentive to servicers and investors for pursuing short sales and deeds-in-lieu of foreclosure. The program was designed for homeowners who fell out of the Treasury’s Home Affordable Modification Program and was touted as a new standard for short sales.

But both HAFA and HAMP have struggled. The Treasury has spent only $4.3 million through HAFA, inducing roughly 661 short sales since the program launched, according to the Congressional Oversight Panel, the Troubled Asset Relief Program watchdog.

With such low numbers, the Treasury has eliminated rules that have constricted eligibility for HAFA. Among them, servicers are no longer required to verify a borrower’s financial information or determine if the borrower’s total monthly mortgage payment exceeds a 31% debt-to-income ratio. Servicers still must obtain a signed hardship affidavit.

“While this requirement has set the standard for mortgage affordability under HAMP, it is not as important for homeowners ready to transition out of their home,” a Treasury official said. “Eliminating this requirement further streamlines the process for homeowners applying to the program.”

Larry Bird, an executive at BirdRock Enterprises and a vice president for the Foreclosure Response Team, a company that specializes in short sales, said removing the 31% DTI requirement should allow many more people to qualify for HAFA.

“This will certainly help, the 31% ratio should have never been part of the HAFA requirements to begin with,” Bird said.

In order to get more second-lien investors to clear short sales, the Treasury changed how servicers pay out to these holders. Before, the second-lien investor had to agree to accept 6% of the unpaid principle balance owed to them, up to $6,000. But the new guidelines eliminate that 6% rule. Now, servicers on behalf of the investors determine the amount or percentage of the unpaid principal balance of the second lien to be paid to each holder.

However, the cap still remains at $6,000.

The Treasury also directed servicers to grant borrowers who request consideration for HAFA the same timeline as those who are approached by the bank. Now, all borrowers must receive a short sale agreement no later than 30 days after request.

The Treasury said it will begin reporting official HAFA numbers in the first quarter of 2011.

Source: Jon Pryor