Archive for the ‘News’ Category

Stimulus Bill and FHA

Thursday, February 19th, 2009

The stimulus bill, The American Recovery and Reinvestment Act passed Congress on Friday and is to be signed by President Obama on Tuesday, February 17th.  The Bill does mention the FHA, Freddie Mac and Fannie Mae, the government lending bodies. One of the things the Bill does for these organizations is to raise their lending limits. In 2008, lending limits were raised significantly to allow the FHA to step in and help more people facing foreclosure. Those levels reverted back in 2009. The Bill pushes the limits back to the 2008 level. This means more funds are available for these banks to aid those purchasing homes.

What Do New Limits Do?

There are several things that this new higher limit offers to the mortgage industry. First, by raising the limit, there is more money available to these organizations to purchase loans. This means that when Joe Smith comes to purchase a home, and would like FHA backing on that loan, he can get it because the funds are available to allow for this.

As you know, the FHA allows individuals to get a lower interest rate when borrowing money because it gives the lenders an added insurance that the loan is secure to them. If the borrower with an FHA loan fails to make payment, the property is foreclosed on, but the loan holder can file a claim with the FHA to be reimbursed some money. It works very much like an insurance policy for the lender. Because of the lessoned risk, the lender offers a lower interest rate to the borrower. In short, it aids each body involved.

There are other ways this new higher limit on Freddie Mac and Fannie Mae will. Because it does free up some of this money, more people will qualify in all likelihood for these home loans. With better qualification numbers, more homes can be purchased. People can afford to purchase a home again with the lower interest rate. In turn, more properties that have been sitting on the market or even vacant can be sold. In other words, by raising these limits, the government is aiding in reducing inventory of available housing. This will give cities back their property taxes and aids in boosting other home values throughout the area.

The overall process improves the liquidity of the mortgage market as a whole. Many economists blame at least part of the economic downturn on the failure within the housing market. By restoring some stability here, it could also help to restore some of the value in housing and the markets as a whole.

What Does It Mean To You?

As you consider the Bill and what is included in it, one thing you may want to consider is your own ability to obtain a mortgage and to purchase one of these homes. Not everyone will qualify for a home loan through this program, but far more money is available to help more people to qualify. If you have been considering purchasing a home, but where not sure if you could, or should do so, there benefits of these increased limits makes now an ideal time.

The benefits of having an FHA loan are immense and it should not be overlooked by anyone who is looking for an opportunity to buy a home. Keep in mind that you will still need to meet income and credit qualifications to obtain an FHA loan. If you have been thinking about this type of loan opportunity, take the time to talk to an FHA loan specialist to find out if you qualify for the loan.

The New Tax Benefit Of Buying A Home

Tuesday, February 17th, 2009

If you are ready to purchase your FHA backed home mortgage, now may be a great time. In the recent Bill to pass Congress, the American Recovery and Reinvestment Bill, Congress has put into place a substantial benefit to individuals who purchase a home this year. Those who are ready to buy will find that this benefit is sizable and lucrative, making it an ideal time to buy.

What Do You Get

The stimulus bill gives individuals who purchase a home in 2009 a sizable tax break. The Senate’s version of the bill called for much more than actually passed, but for first time homebuyers, this new benefit is still very enticing. For those who purchase a property in 2009, a onetime $8000 tax credit will be available to them. This tax credit does not have to be repaid as similar opportunities in previous years have required. Rather, as long as you make under $75,000 as an individual or $150,000 jointly, you will qualify for this tax break.

Anyone that has not owned a home in the last three years is technically qualified as a first time homebuyer. This means that millions of people may have these funds available to them currently. This particular element in the stimulus bill costs $6.63 billion, but may be well worth it for several reasons.

#1: It gives individuals more of a benefit to purchase a home even if they thought now was not the time. For example, if you were unsure if the bottom of the market had hit, and you wanted to get the best deal available, buying in 2009 is likely to be a good opportunity to save money in the form of a tax credit.

#2: It helps to clean up some of the inventory that is sitting open on the real estate market right now. This will help to boost the property values of homes in the neighborhoods. In addition, it allows cities to get back some of their property tax dollars they have lost. Many cities throughout the country are cutting jobs and services because they do not have the property tax income they need to pay for such services. Getting people back into those homes may be particularly beneficial to the cities.

#3: Those who may have needed that extra reassurance that now is the right time to buy a home can get it. Credit standards are still tight, but with this added benefit, more people will see that now is a great time to own property.

What To Keep In Mind

One of the problems with tax breaks like this is that people often think of it as free money. It is important to note that while you do not have to pay this money back, you still have to qualify for the mortgage to obtain the house in the first place. It is highly recommended that you have some money to put down to buy the home and have a good or better credit score. With these qualifications, you may be able to obtain a home loan through FHA.

Do not overlook the benefits of FHA loans. These loans can sweeten the deal even more so by giving you an added benefit of a low interest rate on the home you buy. You will pay less tax and you will pay less in terms of interest over the lifetime of your loan.

To find out if you qualify for an FHA loan, contact an FHA loan specialist. Ask them about how this tax break can help you to save money while buying a home.

FHA Moves To Second Phase Of Helpline For Homeowners

Wednesday, July 16th, 2008

The FHA is out there to help. This week, the second phase of the direct mail campaign the agency has in place will roll out. That means that some 675,000 people who are considered at risk for losing their home will get help from the agency, or at least the offer of help.

The agency will mail out thousands of letters this week to those who are going through foreclosure as well as those who are at risk for doing so, to offer help. The agency has used this method to get people back on track for their loans, and help them to avoid foreclosure. The FHA is offering a method that allows these homeowners to get into better mortgages that are safer to the homeowner (and the lender) as well as helps them to get out of the higher costing mortgages they are currently facing.

A few months ago, the organization provided the same type of help to some 280,000 people. In that batch, from February, was just the first round. They plan to help at least 850,000 homeowners by September of 2008. The letters are part of the organization’s public awareness campaign, which stresses that homeowners have options beyond foreclosure.

There has been quite a bit of talk about foreclosure being the only solution for many struggling homeowners. While many people have selected to cut their losses and run, this is highly risky. Not only do they lose any investment into their homes they have made over the last few years, but they also put themselves in a situation where they may not be able to purchase a home for some time through damaged credit and financial struggle. This FHA program is alerting those homeowners best positioned to stay in their home through new loans.

In a statement about the letters going out, the HUD Secretary Steve Preston had this to say, “This letter might be the most important piece of mail many of these families will receive this year. This information could not only help save their current home, it could help provide them with long-term financial security. This outreach campaign will ensure families are aware of the safe mortgage alternative offered by FHA.”

Who Gets The Help?

The letters being sent by the FHA are a small fraction of the help available, but those receiving the letters should take advantage of them quickly. They are headed out to those who have already faced or are currently facing their first reset of the adjustable rate mortgage they have.

If you are one of the many that will receive this letter, act on it. FHA loans are highly desirable because they are backed by the federal government, are more affordable and they are safe, unlike many of the high risk loans out there that many homeowners are struggling with currently.

At the same time, if you are unable to get the help you need, or are facing a reset of your mortgage interest rate soon, you can still get help, even if you do not receive one of these loans. The FHA is available to anyone in the United States, though there are loan requirements.

If you are interested in finding out if you qualify for FHA loans, take the first step. While the organization cannot help all borrowers, it can help those that are struggling, those getting into loans, and even some of the higher loan amounts (the FHA has been approved to lend to those homes with values up to $729,750 through the end of the year at least.)

For those that get a letter from the FHA, do not make the mistake of tossing it out. It will be the most important letter you receive.

FHA Loan Holders Get Relief From Destruction

Friday, June 6th, 2008

In recent weeks, there has been a lot of destruction.  Much of the south and central portions of the country have been ripped apart by devastating tornados.  Floods, hurricanes, earthquakes and terrifying thunderstorms have left a path of destruction across much of the country.  Homeowners are barely able to find shelter and yet many are fearful of what will happen to their home’s mortgage.

For many people who have FHA insured loans, there is some relief available.  According to the guidelines of most FHA loans, the lenders are not able to press you for payment in such circumstances.  They cannot file for foreclosure on your home until a fully 90 days has past.  This gives you time to get things back into place, at least financially speaking, or to find another option.

If your home had damage or destruction, this type of FHA loan backing can be quite helpful (perhaps yet, another reason to consider FHA loans over other types whenever you qualify.)  Now, not all thunderstorms will qualify for this type of help.  It is meant to be in use in only a handful of the worst situations.  Areas that the President has declared to be a disaster area are those that will qualify for this relief.

In addition to this, if your place of employment has been damaged or destroyed at the hands of such weather occurrences or manmade events (like wildfire for example) you too may qualify for such protections even if your home hasn’t been damaged at all.

The FHA insurance on your home is there to help protect you from losing your home, but you still need to talk with your lenders and get into the necessary programs.  Because most lenders are more than willing to keep a good paying customer in their current mortgage, they are likely to have some solution for you.  This can drastically help them save you as a customer and the FHA programs are there to help provide reassurance.

If you believe you may qualify for this type of backing, contact your lender today.  Find out if your particular situation qualifies.  You can also contact your local HUD offices to learn more about the help that is available to you here.  Chances are, there is protection available o you through your FHA loan.

Tightening the Reins on Mortgage Lending

Monday, March 17th, 2008

Is this supposed to be a surprise to anyone seeking to get a loan in this housing market? Seriously because almost day after day we are reading increasing stories on the number of foreclosures, the mortgage rate and even lenders. Maybe the actual fact the guidelines are being tightened is not a surprise but what they are saying is. I must admit I was stunned to find out this was happening.
I read a story that came out of Ohio that shared how the guidelines are being tightened on mortgage lending. It shared that basically due to the sharp increase in foreclosures nationwide, Fannie and Freddie are implementing tighter underwriting guidelines on approving a family for a home loan. Some changes are significant and have begun to take lenders, real estate agents and prospective homeowners by surprise.
I want to share a few of these that I know will affect homeowners: one of the biggies I would believe would be the Appraisal Guidelines. Why, because with the market being soft there is not in my opinion any way that your home could appraise at the same value today in 2008 that it might have appraised for at the end of 2006 or beginning of 2007, especially with homes in your neighborhood or area that have been foreclosed on. Foreclosure affects home owners that are not facing foreclosure because the number of foreclosures in the neighborhood brings down property value.

I remember when we were selling our home, we had the standard walk through appraisal. Now it seems, in addition to the standard walk through appraisals by a licensed appraiser, lenders now are requiring an automated valuation model which is statistical data from all the real estate sales that have taken place in that specific area. The rule now says whichever value comes in less will be the true market value. It goes on even further to say if the assigned appraiser declares your home to be in a declining market or should the new automated underwriting track your property as an area deemed to be in a declining area, the buyer cannot get 100 percent financing. I know that will affect some people.
We know that one of my favorite subjects is credit. Apparently it is one of the topics of discussion here as well.

From what I can gather, Fannie Mae and Freddie Mac’s major changes take place in March 2008 affecting how conforming mortgages are priced with an interest rate. The new guideline will (not optional) require lenders to review credit scores and down payment information before a mortgage rate can be offered. New interest rate adjustments will apply to high loan to value, low scores, cash out refinances and investment properties. Once again, credit score is important. A point that I found interesting was at the end of this story it said these changes have not affected programs from The Federal Housing Administration. In an FHA mortgage loan, the mortgage insurance is provided by the borrower and included in the loan. As I have said in previous blogs, do your research. Talk to a lender and see what your options are. If you are strictly seeking an FHA Loan, know that all lenders are not FHA approved. I cannot stress doing your due diligence enough.

Dr. Taffy Wagner

House-Swapping – Home Ownership from A Creative Perspective

Monday, March 3rd, 2008

I must admit, I am one of those people that love creativity. What is happening with the housing market is literally forcing people to get creative. Think outside the box. If there has ever been a time, this is a good time. Why because when you think inside the box it is limiting to the way things are always done. Now, there is a world of opportunity. I was contacted by a friend and colleague who knew I was writing a mortgage blog. She briefly told me about this house-swapping story.

 

I was all too excited to go and find out about house-swapping. From what I understand, people that live in different places that have a house for sale and have not been able to sell, look for houses in the area they want to move that are for sale. You have to love modern technology. This is where the internet comes into play. You can search an online database (Domuswap.com) where people can go state by state. That is absolutely phenomenal. It also tells you how many properties available by state and then it shows you in the different cities or counties.

 

Even in this transaction, a realtor has to be used. What each party should agree is to utilize the same realtor which in return reduces fees. The realtor should be willing to work with lowering their fees or commission based on the transaction taking place. If the properties are of equal value it is a swap, if they are not there is some cash exchanged. I have to say, I would have to and see the property to make sure it would be conducive to my needs. Why do I say that? You do not get to choose your own furnishings and all those things. However, at the end of the day you also do not have that expense. Not necessarily a huge moving cost either. The more I write about this, it keeps getting better and better to me.

 

This could definitely solve those moves that need to happen quick due to job relocation, or even health concerns. If you are someone that has a house that has been on the market for a while and have not had any luck, I think this would be an option worth considering. Let your fingers do the walking and see if someone is looking for a home like yours.

 

We have looked at the advantages, are there disadvantages to this equation? The only questions which might not be disadvantages are the following: I would want to know about the neighborhood and school system. Something that came to mind is how do the utilities and other bills get handled that belong to the property. When you do a house swap, do you do it for a set period of time? Find out all the particulars before you do a house-swap.

 

Think about it, house-swapping is bartering coming back to life. Not that it has been non-existent in some fashion. However, I think it is being revived on a much larger scale.

 

Dr. Taffy Wagner

Numbers Going Up and Through The Roof

Wednesday, January 16th, 2008

This is a bit of news that I believe the readers should know about as well. Even though the majority of the blogs written here provide information about FHA and also some current news, it is just as important that you are aware of some other aspects of the mortgage industry. Why? Because I believe that some of what I am about to share you could already know or this information is going to give you insight into what could have happened to you.

I was talking with my brother about my blogging and he said did you see this article about mortgage fraud. I asked him what he was talking about and he basically gave me the gist of it – there are so many mortgage fraud cases filed that the officials that prosecute the cases cannot keep up. So I took the time and did some research and found out that banks filed 47,717 cases this year which is up from 21,994 two years ago which was according to Federal Bureau of Investigation and Financial Crimes Enforcement Network of The Treasury Department. What does this say to you? This says to me that people were clearly being taken advantage of by people in the mortgage industry.

Understand this before you get all in an uproar, I am not saying everyone in the mortgage industry was bad. What it says is that you must be careful and do your due diligence before hiring a realtor, mortgage broker, banker or lender. As a matter of fact, in every area of your life, you should do your homework and background checks. Let me give you a prime example, I recently received a letter in the mail from a company that read about me on a press release. They contacted me basically throwing out some names that I would know. I finished reading the letter and put it aside. I had decided that after a couple of days, I would do some research on the internet to find out about them. After doing my research, I had found some very derogatory information that was recent from several different people. I was very proud of myself for not being too eager to jump right into something without having done my homework.

Look at these numbers as well because when I say numbers are going up, they are going up. I remember last month there was an article that said the number of foreclosures filed here had already topped last year’s filing in November. For any of you that have followed
Colorado’s foreclosure being in national news as #1 in the nation for foreclosure during the past year. So I am sure even where you are, the foreclosures have made record numbers.

If mortgage fraud is up, then it almost stands to reason why there are tons of foreclosures. Does make you say hmmmm. It did for me because that has to be a part of it. Once again even if you are facing foreclosure, thoroughly read all your paperwork.

Taffy Wagner

The Mortgage Crisis Could Affect You

Wednesday, December 26th, 2007

More and more horror stories are coming out about this mortgage crisis. Like me, I am sure many of you are realizing it is getting worse before it gets better. This past week, I read a story that stated Washington Mutual would be closing offices and laying off 3,000 workers. Has anyone started thinking about all these employees that are being laid off? I can’t help but think about them because when you are laid off from a job, everything is now subject to your lack of receiving a paycheck – your mortgage, auto loan, auto insurance, groceries, etc. Some might have received a severance package that only lasts so long. Normally, a layoff is not something you plan for and people are caught unaware and end up in situations unprepared. I digress; let me return to the mortgage crisis.

Last week I briefly shared about the mortgage plan that was being unveiled. Remember, I made a comment about what happens to the people that are already delinquent, because they too need help! Hooray seems as if maybe someone out there in cyberspace or powers that be were thinking the same thing. I just read where the Senate passes bill addressing mortgage crisis. Before you begin doing cartwheels, do you realize the House passed a similar bill back in September? From what I can understand, the two chambers must now come to an agreement on the legislation before sending it to the White House for approval.

Let me share what this bill says that the senate has passed. This particular bill would allow the Federal Housing Administration to back refinanced loans for tens of thousands of borrowers who are delinquent on payments (okay, just for that statement alone I am doing cartwheels) because their mortgages are resetting to sharply higher rates from low initial “teaser” levels. I have always believed that when people are already delinquent, you need to help them see the light at the end of the tunnel and give them some hope to know that someone out there is concerned about what they are going through. Sure, you didn’t cause them to make the choices they made; however, how much better will it make a loan officer, mortgage company or even bank look to be a part of the solution. How many people will they tell that ABC Company helped me when I thought I was about to lose my house or when I had to make the choice between paying my mortgage or having Christmas for my family.

Do not think for one minute, that consumer that was facing these trials and tribulations would not tell everyone they know how ABC Company came to their aid. I personally would be shouting it from the rooftop telling everyone I knew. If I had a blog, I would be blogging about their help, customer service and everything. They potentially begin to receive so many referrals; they would not have to advertise. Will you be a part of the solution or aid the problem?

Taffy Wagner