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  1. Millions of Underwater Borrowers to Benefit from HARP Program Changes?

    By on November 16, 2011

    As promised last month by the regulator of the two government-sponsored mortgage companies, changes to the Homeowner’s Assistance Refinance Program (HARP) are now in place which may enable more than 1 million homeowners who owe more on their mortgages than their homes are worth to refinance at today’s very attractive interest rates.  Many lenders are going to participate as the government has taken much of their potential risk away from refinancing these loans.

    Key points for consumers to be aware of include:

    • Program is extended through December 31, 2013

    • Eligible loans must have been purchased by Fannie Mae or Freddie Mac before May 31, 2009 and have a loan-to-value ratio of greater than 80%

    • There is no loan-to-value cap (It does not matter how much your current value is less than your current mortgage balance)

    • Homeowners must be current on loan for previous six months, 1 late payment in previous year

    • New appraisal may not be needed

    Analysts have indicated that most of the loans that will likely benefit from these changes were originated in the period between 2006-2008. Potentially 1.5 million homeowners will be able to take advantage of this program due to the changes.

    Lenders are expected to be aggressive in marketing this program because when they refinance existing loans for which they are ultimately on the hook, they will reduce their future risks.

    Total Mortgage Services, LLC is prepared to guide you through the HARP refinance process with mortgage professionals who are experienced and determined to improve the financial position of their clients.

    To find out if your loan is owned by Fannie or Freddie, to discuss the program requirements further or lock in current rates:

    • speak with a mortgage professional now by calling 877-868-2509

    Category: Current Mortgage Rates, Fixed Rate Mortgages, Housing Market, Mortgage Interest Rates, Mortgage Regulations, Refinance, Stimulus

  2. House Passes First Time Home Buyer Tax Credit Closing Extension

    3 By on June 29, 2010

    Update 7/1/10: They waited until the very last minute, but last night the Senate passed the stand alone bill from the House of Representatives that would extend the closing date to claim the first time home buyer tax credit from June 30th until September 30th.  The measure passed the Senate unanimously and President Obama is expected to sign the bill into law today.

    Update 6/30/10 11:57am:  I am still unsure when (if) the Senate is going to consider this motion today.  I have been watching CSPAN2 this morning and so far they have discussed the passing of Sen. Robert Byrd at length, and now they are discussing the Gen. Petraeus nomination.  Take it with a grain of salt because I have received misinformation in the past, but I spoke to a staffer at Sen. Lieberman’s office and he was unsure when or if the Senate would consider the House bill.  He did tell me that the Senate is going into recess sometime this afternoon until after the July 4th holiday.  If I learn more I will post it here.

    Good news: the House passed a measure to extend the closing date for the first time home buyer tax credit until September 30th today.  The measure passed 409-5.

    The bill will move on to the Senate, where it will probably pass, based upon the fact the Reid Amendment that would’ve accomplished the same thing easily passed earlier in the month, although the bill it was attached to was ultimately defeated.

    In case you were curious, the five who voted against the bill were:  Representative John Campbell (R-CA), Rep. Jeff Flake (R-AZ), Rep. Jeb Hensarling (R-TX), Rep. Tom McClintock (R-CA), and Rep. John Linder (R-GA).

    I promise to post more on this tomorrow as I discover more details.

    Category: Mortgage Rates, Stimulus

  3. States to Pay Off Mortgage Liens for Troubled Homeowners

    By on May 13, 2010

    States to Pay Off Mortgage Liens for Troubled Homeowners

    Back in February, the Obama administration laid the foundation for a $1.5 billion program aimed at helping homeowners who live in the states most affected by the housing crisis. Tabbed the “Hardest Hit Fund,” the resources are coming from the Troubled Asset Relief Program (TARP). The initiative specifically targets financially strapped homeowners who are unemployed, underwater on their mortgage or both, to avoid foreclosure in Arizona, California, Florida, Michigan and Nevada. These five states witnessed home values drop by more than 20 percent from their highest point. Now, a second round of five states – North Carolina, Ohio, Oregon, Rhode Island and South Carolina – are in the midst of receiving approximately $600 million in additional TARP funds to help embattled homeowners.

    From the onset, the Obama administration has left the details of the program up to the individual states. Unfortunately, as home values continue to decline, foreclosure figures continue to climb. With this in mind, at least some of these 10 states are considering paying off the mortgage debt for homeowners who meet criteria that has yet to be completely disclosed by each individual state.

    On the surface, paying off a mortgage for homeowners in financial distress seems like the right thing to do. However, there are always loopholes that are inevitably exposed for all the wrong reasons. While the economy is on an upswing and unemployment figures are somehwat more promising each month, paying off a mortgage for someone who is unemployed may dissuade unemployed homeowners in these states from seeking employment.

    To combat this problematic scenario, it is anticipated the states who engage in this practice will only incorporate a relatively small number homeowners who are unemployed and underwater. All in all, it’s an innovative approach the federal government was and remains hopeful of.

    Robert Hyder

    Category: Stimulus

  4. Geithner Has Strong Words for Mortgage Servicers

    By on April 30, 2010

    Geithner Has Strong Words for Mortgage Servicers

    U.S. Treasury Secretary Timothy Geithner criticized mortgage servicers yesterday for not doing enough to help troubled homeowners avoid foreclosure. In a prepared statement before the Senate Appropriations Committee, Geithner said, “We do not believe servicers are doing enough to help homeowners; not doing enough to help them navigate the difficult and frightening process of avoiding foreclosure.” The Senate Appropriations Committee is one of the most powerful committees in the United States Senate.

    Geithner continued by saying, “None of this is acceptable,” and indicated the Treasury Department would begin conducting “targeted, in-depth compliance reviews” of mortgage servicers to ensure they are doing their part to help struggling homeowners avoid foreclosure.

    Geithner’s strong words for mortgage servicers comes on the heels of a statement made in March by Herbert M. Allison before the Committee on House Oversight and Government Reform. Allison, the Assistant Secretary for Financial Stability and Counselor to the Secretary of the Treasury, announced amendments to the Home Affordable Modification Program (HAMP) that would effectively force mortgage servicers to provide more help to homeowners facing foreclosure.

    Mortgage servicers have been accused of losing documents while continuing to foreclose on properties of homeowners who may have been eligible for relief. In reference to incentive fees paid to mortgage servicers by the federal government for assisting homeowners avoid foreclosure, Geithner specified, “In circumstances where servicers are not compliant, we will withhold incentives or demand their repayment.”

    In addition, the Treasury Department’s upcoming ranking system of mortgage companies and how they deal with struggling homeowners will be published and widely distributed. This sort of “shame list” will undoubtedly compel mortgage servicers to curtail their approach as Congressional leaders, as well as everyday citizens, will see how they rank. It will ultimately be a public relations testimonial for the companies, but it will be up to them if it will be good or bad.

    Robert Hyder

    Category: Stimulus

  5. Treasury to Sell 1.5 Billion Shares of Citigroup Stock

    By on April 26, 2010

    Treasury to Sell 1.5 Billion Shares of Citigroup Stock

    The Treasury Department, under advisement of Morgan Stanley, will sell up to 1.5 billion shares of stock in banking giant Citigroup. Currently, the federal government owns roughly 7.7 billion shares of Citi stock, which is worth approximately $4.70 a share. By selling 1.5 billion shares, the government will likely produce a lofty profit of more than $2 billion.

    The U.S. government obtained a controlling interest of the mortgage conglomerate when $45 billion in bailout funds were made available in 2008 through the Obama administration’s Troubled Asset Relief Program (TARP). Citi has since repaid $20 billion to the government, while the Treasury Department converted the remaining $25 billion in preferred shares into 7.7 billion common shares, netting a taxpayer profit of approximately $30.5 billion.

    The move by the Treasury Department is the latest effort to reduce the federal government’s support of the major banking institutions that received taxpayer bailouts as a result of the recession and the housing crisis.

    Although the Treasury Department did not disclose when the stock sales would begin, it did indicate it would proceed “in an orderly fashion under a prearranged trading plan with Morgan Stanley …” Morgan Stanley is expected to be granted the authorization to sell additional Citi shares once the initial1.5 billion shares have been sold.

    Other banks to receive TARP funds, including Wells Fargo, JP Morgan Chase and Bank of America, have already paid back their funds to the Treasury Department. In an interview with CNN television on Sunday, Treasury Secretary Tim Geithner said, “We’re putting TARP out of its misery.”

    Robert Hyder

    Follow Total Mortgage on Twitter

    Category: Stimulus

  6. Fannie Mae Enhances DU Refi Plus

    By on April 13, 2010

    Fannie Mae Enhances DU Refi Plus

    Effective with loan applications on or after the weekend of April 17, Fannie Mae will enhance DU Refi Plus to provide consistency with their other popular refinance program, Refi Plus. Presently, DU Refi Plus does not permit a borrower to be removed from a mortgage loan, while Refi Plus does in circumstances involving death or divorce. Updates to both programs will be expanded to permit the removal of borrowers for any reason, not simply involving circumstances of death or divorce. The updates to DU Refi Plus will not only provide consistency between the two programs, but it will also expand eligibility for a number of borrowers.

    Other updated features to DU Refi Plus include:

    •    Remaining borrowers must exhibit proof of making the monthly mortgage payment from their own funds for the previous 12 months

    •    Borrower being removed from the loan application must also be removed from the deed

    •    If a borrower is removed from the loan application due to death, the 12-month payment history will not be required

    Additionally, the enhancements to DU Refi Plus will no longer eliminate borrower eligibility for the program if the Social Security Number does not match the mortgage loan being paid off. Previously, such instances would disqualify borrowers from proceeding with their refinance through DU Refi Plus. Now, however, as long as the borrowers can provide acceptable documentation that they are one and the same, DU Refi Plus will remain a viable option.

    The latest enhancements to DU Refi Plus will potentially save a mortgage rate that may have been previously locked at a lower rate than current market conditions.

    Robert Hyder

    Follow Total Mortgage on Twitter

    Category: Stimulus

  7. Pending Home Sales on the Rise: Good News for Recovery Efforts

    1 By on April 5, 2010

    The National Association of Realtors announced today that pending sales of U.S. existing homes rose by 8.2% in February, representing the second-biggest gain recorded by the pending homes sales index (PHSI) and the largest since October 2001. Pending sales, which tally contract signings, are considered to be a leading indicator of economic activity. This news, along with March’s positive jobs report, indicates that the housing market and the American economy at large are on the right path towards a sustained recovery.

    Home sales in April are expected to increase as buyers take advantage of low current mortgage rates and a homebuyer tax credit that will be expiring at the end of the month.  With the Federal Reserve recently ceasing its purchasing of mortgage bonds, however, it will be interesting to see how homebuyers respond to market conditions void of heavy government participation and incentives that kept mortgage rates near all time lows. According to Michael Feroli, chief U.S. economist at JPMorgan Chase & Co, even if the increase in home sales is inspired by the homebuyer tax credit, “if what we’re seeing in the labor market is actually showing decent growth, then I would expect housing would follow along.”

    Pending home sales increased significantly in three out of four regions in the United States in February, with the Midwest experiencing a surge of 22%. Purchases increased by 9.2% in the South and 9% in the Northeast. Only the Western region of the United State experienced a decrease of 4.8%. These increases in the pending sales of existing homes are essential to the resurgence of the American housing market, as they reduce inventory and help stabilize home values.

    With the aforementioned departure of the Federal Reserve from the mortgage bond industry, mortgage rates have already started to rise and are expected to continue to do so throughout the year. Additionally, the homebuyer tax credit will be expiring at the end of this month on April 30. If you are interested in purchasing a new home or refinancing your existing one, now is the great time to take advantage of low mortgage rates and homebuyer incentives by calling 877-868-2509 to speak with one of our mortgage experts.

    Category: Mortgage Rate Trends and Analysis, Stimulus

  8. Delinquent Mortgages Continue to Re-Default Despite Loan Modifications

    1 By on March 26, 2010

    According to a recent report, more than half of U.S. borrowers who received loan modifications on delinquent mortgages defaulted again after nine months in 2009. A joint report released by the Office of the Comptroller and Office of Thrift Supervision on Thursday said that the re-default rate of loans modified in the first quarter of 2009 was 51.5% by the end of the year. While depressed home prices and low current mortgage rates continue to make it a strong buyer’s market, many homeowners are struggling to make payments as basement-level home prices are forcing them to owe more than their homes are actually worth. The median price for an American home was $165,000 in February 2010, down a disturbing 28% from its peak in July 2006.

    Approximately 24% of properties with a mortgage were underwater (meaning the value of the home has sunk below its mortgage value) in the fourth quarter 2009. According to Sam Khater, a senior economist at First American CoreLogic, modifications “clearly are not working well and it’s not a surprise. It’s pointless to rewrite these loans because they’re underwater.” In 2010, 4.5 million foreclosure filings are expected, and the Obama administration is pressuring lenders to alter loans to reduce the number of properties lost to foreclosure.

    The administration’s $75 billion Home Affordable Modification Program (HAMP) has come under a lot of scrutiny, and critics such as the Special Inspector General for the Troubled Asset Relief Program argue that “the program will not be a long-term success if large amounts of borrowers simply re-default and end up facing foreclosure anyway.” In order to improve the HAMP and help reduce the number of home foreclosures, the mortgage modification program is going to be modified itself effective June 1.

    We at Total Mortgage Services value your opinion and would love to read your thoughts regarding current mortgage news and continued efforts to improve the housing market. Join the discussion below.

    Category: Current Mortgage Rates, Mortgage Rate Trends and Analysis, Stimulus

  9. Mortgage Modification Program to be Modified Itself

    By on March 26, 2010

    Mortgage Modification Program to be Modified Itself

    Effective June 1, the Obama administration’s $75 billion Home Affordable Modification Program (HAMP) will be modified itself to force mortgage loan servicers to take a more proactive approach in helping struggling homeowners who are facing foreclosure. Essentially branded ineffective, the program will undergo long-desired changes designed to expand its outreach while also accelerating the process.

    Mortgage servicers will be required to prescreen all borrowers who have missed at least two monthly mortgage payments to ascertain eligibility into the program. If the borrowers meet the eligibility requirements for HAMP, the mortgage servicers “must proactively solicit those borrowers” to participate.     Additionally, the program will be expanded to incorporate homeowners that have already filed for bankruptcy protection. Mortgage servicers will be expected to streamline the decision process and expedite the documentation process.

    At a hearing before the Committee on House Oversight and Government Reform, Herbert M. Allison, Jr. announced the amendments to the program. Allison is the Assistant Secretary for Financial Stability and Counselor to the Secretary of the Treasury. As critical opponents to HAMP, many Congressional leaders from both sides of the isle have brought into question the effectiveness of the program.

    Introduced approximately one year ago, the intent behind HAMP was to reduce monthly mortgage payments for borrowers to prevent foreclosure while incentivizing mortgage servicers for each modification they perform. The program aspires to modify mortgage loans for 3 to 4 million homeowners by 2012. Permanent modifications have increased by nearly 45%, but nonetheless falls significantly short of the program’s lofty goal. The most recent Treasury report indicates that more than 170,000 permanent modifications have been completed and that number continues to rise. The upcoming changes to the program should certainly facilitate sustained growth.

    Continuous complaints from a growing number of homeowners getting the runaround and being frustrated with delays caused by the servicers have triggered the overhaul of the program. Congressman Edolphus Towns (D-NY), Chairman of the committee said, “We continue to hear numerous reports of borrowers who want to participate in HAMP, but just don’t know where to begin … If they do begin, they often encounter unresponsive lenders, repeated incidents of lost paperwork and a variety of other administrative frustrations.”

    Allison responded to the criticism by defending the program’s intentions and noted the changes to the program are designed to address such complaints. “The administration has made substantial progress in implementation and has seen initial signs of housing stability, but a number of critical challenges remain.”

    Robert Hyder

    Follow Total Mortgage on Twitter

    Category: Stimulus

  10. Bank of America to Offer Principal Reduction Plan

    1 By on March 24, 2010

    Bank of America to Offer Principal Reduction Plan

    According to an earlier report by Reuters, Bank of America is expected to announce a plan today that will forgive a portion of a borrower’s principal balance on their mortgage loan if they owe more than 120% of their home’s value. Additionally, the plan will include principal forgiveness on loans with negative amortization.

    As outlined by Reuters, the program will commence in May. The program entails Bank of America offering borrowers who remain current with their monthly mortgage payments a five-year, interest-free forbearance period. The intention of the five-year, interest-free forbearance period is to provide a strategic timeline in which homeowners have an opportunity to reduce the loan-to-value (LTV) of their home back to 100%.

    While the federal government’s efforts have largely been concentrated on keeping mortgage rates artificially low, Bank of America’s plan to reduce a homeowner’s principal balance is one of the first of its kind by an independent lender. Many homeowners are so deeply underwater that they are simply walking away from their mortgage obligations. By taking the initiative, Bank of America hopes to prevent the foreclosure crisis from intensifying. Regardless, many mortgage analysts are predicting the foreclosure dilemma will indeed amplify as we progress deeper into 2010, much to the chagrin of the federal government who has made little effort to thwart declining home values.

    During the housing economy’s heyday when obtaining a mortgage loan was nearly as easy as ordering a pizza, borrowers were lured into accepting mortgage loans with negative amortization. Negative amortization is the gradual increase in the principal balance when the monthly mortgage payment is not enough to cover the principal balance and interest due. This feature resulted in continually increasing principal balances, leaving homeowners deeper and deeper underwater. On loans with a negative amortization feature, Bank of America intends to reduce the principal balance to as low as 95% of a home’s value. Presumably scheduled to begin in May, Bank of America must first identify the borrowers who may be eligible for the program.

    Robert Hyder

    Follow Total Mortgage on Twitter

    Category: Stimulus

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