June 29th, 2009 by Geoff Marks
The “Making Home Affordable” program introduced by the Obama administrationis may soon change to allow higher LTV (Loan-To-Value) ratios which in turn will open the program to more borrowers, particularly those with upside-down mortgages (mortgages where loan amount signifficantly exceeds the property value due to falling home prices).
The program is currently open to the borrowers who’s loan amounts are up to 105% of the property value and are owned or guaranteed by the Fannie Mae and Freddie Mac agencies, which are currently sponsored by the US government.
The Director of Federal Housing Finance Agency James Lockhart has acknowledged in a press conference that the current LTV limit of 105% is being re-considered, however he did not reveal the new LTV figure.
Media reports that LTV limit could be raised to as much as 125% which could theoretically include up …
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June 16th, 2009 by dmitriy
Sheila Bair, the chairman of the Federal Deposit Corp has noted that the loan modification efforts are having positive results, but their ultimate success will most likely depend on the economy and mortgage market.
“My sense is that it’s having an impact,” … but “there is obviously still distress in the mortgage market” Bair said in answering questions after a speech to the Chicago Federal Reserve Bank’s annual bank structure conference.
According to Bair, most mortgage holders will continue making their monthly payments if they are brought down to the affordable level, regardless of whether they are in the upside-down mortgage scenario or not. Upside-down mortgage refers to a condition when a home value is lower than the mortgage owed on the property.
Loan workouts are traditionally more difficult to pursue if the credit distress is driven by a life …
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February 28th, 2009 by michael e. riley
In the past when homeowners were faced with job loss or a change in circumstances that restricted their ability to afford their home and were not able to pay their mortgage they would have the option to refinance with lower interest rates or sell their property. For most currently this is no longer a viable option.
Struggling homeowners cannot refinance due to plunging property values resulting in upside down mortgages, and even when they find a buyer for their property there is the challenge of not be able to sell for enough to repay the outstanding balance.
According to the data from the Mortgage Bankers Association (MBA) 11% of the nation’s home mortgages were delinquent by at least one payment, already in foreclosure or entering foreclosure. 7% of mortgage were at least 1 month past due and 3% of the …
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February 24th, 2009 by dmitriy
Housing Plan to Reduce Mortgage Payment
Many of homeowners have questions regarding the President Barack Obama’s Housing Plan. A lot of Americans are in various stages of foreclosure and the help can not come soon enough. So who is eligible?
The program is expected to help those who are in danger of not making their monthly payments. The applicants do not have to be behind, but may be asked to demonstrate that they may be short on making their monthly payments. The program’s eligibility is determined by whether the monthly mortgage payment is above 31% of applicant’s gross income. Jumbo loans (the loans over $417,000) are not eligible and neither are second mortgages.
The lenders and loan servicers are encouraged to participate in the program by receiving subsidies and various incentives from the government but are not otherwise required …
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February 23rd, 2009 by michael e. riley
Presently the banks are often unable to help reduce mortgage rates for homeowners that are current on their loans. The Obama’s proposed plan is designed to alleviate the situation by encouraging banks to refinance or modify mortgages for responsible homeowners even if they are not yet behind on their payments.
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February 20th, 2009 by Geoff Marks
mortgage modification program – Nearly 9.5 million households, or nearly one out of every five of the nearly 52 million homeowners with a mortgage, spend 38 percent or more of their pretax income on their mortgage payment, property taxes and insurance, the AP’s analysis found. That’s the new threshold to qualify for the loan assistance program launched last month by Fannie Mae and Freddie Mac, the mortgage finance companies now under government control.
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February 19th, 2009 by michael e. riley
stop foreclosure
Housing Secretary Shaun Donovan said Thursday in an interview that it’s critically important that banks and lending institutions “step up to the plate” to help make certain the Obama administration’s new home foreclosure initiative succeeds.
“This started as a mortgage crisis but it’s become a jobs crisis,” said Donovan following the announcement of the $75 billion plan to help prevent foreclosures.
In an interview with the “Today” show on NBC Donovan stated that the administration feels confident that enough requirements are put in place to ensure refinancing by the banks which will “tip the balance for millions of homeowners.”
Sheila Bair of Federal Deposit Insurance Company stated that the while some foreclosures will be unavoidable, the plan should help bring the foreclosure levels to the historical averages.
The plan’s key provision for mortgage modification will only benefit the …
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February 18th, 2009 by Geoff Marks
In an effort to keep 9 million people from loosing their homes President Barack Obama unveiled his $75 billion mortgage relief plan on Wednesday, February 18th
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February 17th, 2009 by michael e. riley
By THE ASSOCIATED PRESS, February 13, 2009
WASHINGTON (AP) — Several big banks, including JPMorgan Chase and Citigroup, are expanding efforts to halt home foreclosures while the Obama administration develops a plan to help struggling homeowners.
The White House said President Obama would outline his plan to spend at least $50 billion to prevent foreclosures in a speech on Wednesday in Arizona, one of the states hardest hit by the foreclosure crisis.
“It’s not intended to be measured by one day’s market scorekeeping, but instead to ensure that the 10,000 Americans each day that have their homes foreclosed on — and the millions more that are barely getting by — are protected,” the White House press secretary, Robert Gibbs, said Friday.
Treasury Secretary Timothy F. Geithner announced a revised effort to stabilize the financial system on Tuesday. It included outlines …
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