FHA Needs $1.7 Billion Bailout

FHA (Federal Housing Administration), provider of mortgage insurance of low down payment loans, is asking the Congress for $1.7 Billion from the Treasury to stabilize its long-term finances and cover potential losses from loans they insured from 2007 - 2009.  FHA is the largest insurer of mortgages in the world, insuring over 34 million properties since its inception in 1934.

The amount is higher than the estimate since it is now insuring fewer loans than before. Additionally, Obama administration expected the bailout since April and has proposed $943 million budget for bailout fund by Sept 30, but the requested bailout was almost double the expected.

This is the first time since the agency's inception that it has required money from the government for its Mutual Mortgage Insurance Fund (MMIF). However, this bailout is so much less than the nearly $200 billion that the mortgage giants Fannie Mae and Freddie Mac required to stay in business during the housing bust.

Fannie Mae and Freddie Mac have recently posted record profits.

FHA Commissioner Carol Galante stressed that the agency does not need to pay claims at this point. It still has more than $30 billion in reserves. However, the law requires the agency to have enough reserves to pay off all claims over the next 30 years.

Big percentage of FHA losses (around $70 billion), were from loans originated from 2007 to 2009 and from its reverse programs.

For any question, please don't hesitate to contact me.

HARP Extended Until December 2015

HARP or Home Affordable Refinance Program will allow its borrowers with loans backed by Fannie Mae and Freddie Mac to obtain new loans until December 31, 2015. HARP was originally set to expire at the end of 2013. 

More than 2.2 million borrowers have benefited from the program so far. The program allows its borrowers to cut loan payments by refinancing at record low interest rates and at smaller monthly payments even if their homes have lost value. 

To qualify for the upgraded HARP, homeowners must meet the following criteria: (Source: www.realtytimes.com)

- The loan must be backed by Fannie Mae or Freddie Mac
- The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009. 

- The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.

- The current loan-to-value (LTV) ratio must be greater than 80 percent.

- The borrower must be current on their mortgage payments with no late payments in the last six months and no more than one late payment in the last 12 months.

If you have any questions about HARP, please don't hesitate to contact me.

Interest Rates Have Hit Bottom Low of Less Than 3%!

According to Mortgage News Daily, the fixed mortgage rates are at their all-time record lows! At current rate, the average 30-year fixed rate mortgage are at its all-time record low at 3.38% and the average 15-year fixed rate fell to a new record low of 2.75%. Last year, at the same time, the 30-year Fixed Rate Mortgage averaged at 4.09%, while the 15-year FRM was at 3.29%.

Freddie Mac's Vice President and Chief Economist, Frank Nothaft, said that, "Following the Federal Reserve's announcement of a new bond purchase plan, yields on mortgage-backed securities fell bringing average fixed mortgage rates to their all-time record lows which should aid in the ongoing housing recovery.  New construction on single-family homes rebounded in August, rising by 5.5 percent to the fastest pace since April 2010. 

In addition, existing home sales increased by 7.8 percent in August to its strongest pace since May 2010."

The Federal Reserve's decision to buy mortgage-related debt has helped the housing market by keeping the mortgage interest rates low, thus, encouraging more buyers to invest in Real Estate.

With the current interest rates, buying a home is practically free! More and more buyers are taking advantage of this all-time record low mortgage interest rates. Why don't you?

For more information on the current mortgage rates, you may go to http://www.mortgagenewsdaily.com/mortgage_rates/.

Avoid Mortgage Scams

As a home owner who is in danger of losing your home to foreclosure, you must be careful in dealing with a company/person who might give you false promises of saving you from foreclosure.  Knowing how to identify these scams can help you save money and headaches in the future.  Remember, KNOWLEDGE IS POWER!  If you know how to spot scams, you can avoid dealing with them and you can report them to the proper authorities.  

Here are some things you should know to indicate that you may be dealing with fraud: (Source: www.freddiemac.com)

- A company/person asks for a fee in advance to work with your lender to modify, refinance or reinstate your mortgage.

- A company/person guarantees they can stop a foreclosure or get your loan modified.

- A company/person advises you to stop paying your mortgage company and pay them instead.

- A company pressures you to sign over the deed to your home or sign any paperwork that you haven't had a chance to read, and you don't fully understand.

- A company other than your lender claims to offer "government-approved" or "official government" loan modifications.

- A company/person you don't know asks you to release personal financial information online or over the phone.

If you or you know someone who have encountered mortgage fraud, you may report them to 1-800-4FRAUD8.

If you are in the danger of facing foreclosure, don't be afraid to seek help.  Here are some things that you can do to avoid losing your home to foreclosure.

1. Call your mortgage lender.  If you are having difficulties in keeping your payments up to date, your lender may offer you some options to help you make your payments more affordable (this might involve lower monthly payments but longer term) and to avoid foreclosure. 

2. Call Freddie Mac Borrow Help Centers.  They offer free, confidential counseling assistance if you are behind on your monthly payments. 

3. Call Housing Counselors. To talk to a housing counselor, you may check out http://www.hud.gov/offices/hsg/sfh/hcc/fc/index.cfm?&webListAction=search&searchstate=AK&filterSvc=dfc for a list of HUD Housing Counseling Agencies located in Alaska.

Remember, the government offers their service for free.  You do not have to spend a single centavo for their assistance.

For more information about foreclosures, please don't hesitate to contact me.