Mortgage Modification – Rates Show Slight Climb

Yesterday Freddie Mac released a fixed rate mortgage report witch shows slight increase in it. prompting further hope of a recovery.This week thirty year fixed rate mortgages were up by .02 percent , while 15 -year mortgages climb up by .01 percent.

All expert believe that thiscould prompt a rise in mortgage applications, as consumers start to believe in market to take out new credit. However ,borrowers are are still warned to make mortgage – related decision with care. They explained more on that the rise could prompt many homeowners to refinance or take out new loans, which could slow down the application process.

Many lenders are also retightening their policies, requiring more documentation to guard against unstable borrowers. President Obama’s $50-billion mortgage aid program, which was recently expanded to include foreclosure prevention measures, is also expected to boost the lending market.

According to the Associated Press, the new measures will make it easier to sell homes with values lower than the mortgage, and to transfer homeownership to the lender.

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Yet Another Bailout Package for ‘Fannie Mae’ !

One of the renowned mortgage service provider company of US – ” Fannie Mae has requested for yet another bail out package of worth $ 19 billion from the Government. As due to increased unemployment and large defaults in sub prime loans company may not do well in future.

Yet Another Bailout Package !

If Fannie Mae gets this aid from government, then this would be their second aid package after march, 2009 when they received 15$ billion aid. Company  officials made it clear that this aid would not be enough to make company completed solvent. In addition officials added,  there are no assurances  for financial stability in future. If we look at the figures, Fannie Mae lost $23.2 billion in this financial quarter which is ten times when compared for  same period last year.

Government agencies seized America’s two leading mortgage companies in last september, and has already spent about $60 billion to stabilize two struggling companies. With this aid the combined aid amount to these struggling companies would reach $75 billion.

Fannie Mae and Freddie Mac played a important role in mortgage market. Together both the companies own about half of all American Home Mortgages.

Fannie Mae has suffered these huge losses due to default house loans in the recent housing bust.  As a result Fannie has $145 billion felonious loans, which are more than the 10 times last year.

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Obama’s Budget Boost to Reverse Mortgage

President Obama has sanctioned a request made by Department of Housing and Urban Development (HUD) worth $ 800 million. The basic motive behind this is to fund the Government backed Reverse Mortgage Program through Federal Housing Administration (FHA). This program has not required money collected through taxes in the past, but decline in home values will increase costs for the government.

Reverse Mortgage

Reverse mortgages provide loans to homeowners aged 62 and above, against their home’s value. The condition is this that the loan is paid back with interest when the homeowner sells the property or dies. The concept of reverse mortgages was in its prime when home prices touched new heights earlier this decade, but once the prices for home prices have fallen, the market for the those loans has disappeared. As a result FHA is as the lone source  for reverse mortgages.

The Federal Housing Administration insures loans against losses, but doesn’t make any loans. For Example, if  FHA guarantees a $300,000 reverse mortgage, (which is known as a Home Equity Conversion Mortgage) and then value of that home has fallen to $257,000 when the borrower dies, the government covers the shortfall to the lender.

This bill was signed by President Obama in February, which increases limits on reverse mortgages to $625,500 from $417,000.

The Federal Housing Administration is not asking for taxpayer’s money for its larger conventional mortgage program, despite of the fact that its revere mortgage value might fall below its threshold value.

According to HUD secretary Shaun Donovan, ” Fundamentally, FHA business is sound and will make money for the taxpayer in 2010.” He added, “he was quite comfortable that the FHA wouldn’t need to increase premiums to cover losses.”

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Loan Modification – Pending Home Sales

Loan Modification - Pending Home Sale

According to a report provided by NAR – National Association of Realtors, ending home sale index showed a unexpected rise since March 2008. The index gained 3.2 % which is beyond expectations, and as a result the index came to an 84.6 point mark, showing signs of revival to housing market.

Experts believe pending sales are based on signed but non-finalized contracts, which they consider to be an important indicator for market activity. These non-finalized contracts forecasts current home sales, which are responsible for each month’s housing market.

According to Lawrence Yun, Chief Economist at National Association of Realtors, this may be a sign of stabilization of economy but still more continous efforts and growth is needed to bring back economy on right track. He added that if  housing industry improves continously with this pace then an economic turnaround may not be far behind.

National Association of Realtors believes that the trend of mortgage lending will soon be back on the market, as the housing reaching affordibility levels up to 31% which is higher than the last year.  In addition arrangements are made to provide tax credit upto $8,000 to first-time buyers which ultimately will boost credit flow. Thus today’s real estate market offers unique conditions for first-time buyers.  Moreover many buyers have been waiting for prices to deflate, but experts believe that this is the best time to invest.

But the rise in pending sales is not evenly distributed, as West and the Northeast and Midwest states are experiencing sligh declines when compared to Southern states which is experiencing a much higher rise. In additionConstruction spending also dropped by 11% compared to the March 2008 estimate.

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TALF – Ray of Hope for Mortgage Loan Seekers

The Federal Reserve today announced a new set of terms for the TALF – Term Asset-Backed Securities Loan Facility, which is Federal Reserve’s earliest lending programs, to include mortgage loan / loans into it.

TALF helps investors to buy consumer debt-backed securities, by granting them low-cost and short-term loans. These low-cost short-term loans lasts for three years and their main focus in on car loans, credit card loans and other small securities. Now in order to increase the investors in Commercial Mortgage-Backed Securities (CMBS), the Federal Reserve is planning to extend the term of these short-term loans to five years.

These five-year maturities will be in effect from June 2009 and will be used to finance asset-backed securities, primarily in the commercial mortgage-backed securities sector. According to Federal Reserve these loans could account for upto $100 billion, so the Federal Reserve has planned to keep evaluating the limit.

The commercial mortgage-backed securities market continues to stuck  on the belief of revival through the TALF program. Currently worth about $700 billion, it has suffered a sizable drop as triple-A bonds fell from 12% to 10% in recent months.

Reducing profits on current debt is essential to the government’s goal to kick-off new lending. This is because banks would not benefit from making new loans as long as investors can buy more secure CMBS for the same profit as compared inferior bonds.

According to experts, reviving the credit flow is crucial to the real estate industry, especially with another wave of mortgage debt coming due in the next few months.

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“Loan Modification – Safe Harbour Plan”

Loan Modification

Few mortgage researchers are of the view that the newly bill  which was recently unveiled by the legislation is aimed at protecting loan servicers and these mortgage researchers believe that this will only lead to more lender abuse and unreasonable LOAN MODIFICATION.

The new bill is based on “SAFE HARBOUR” plan, allowing banking institutions to permit loan modifications without putting the investors at risk. Supporters of this bill believe that, will help to control the investor lawsuits currently plaguing major lenders like Citi and Bank of America.

According to a report there is nothing new in the bill,  and the report says that these loan modifications are in a way repayments which will increase the fees paid to the lenders rather than reducing the balance. The other finding of the report is that the lenders would modify those loans which were considered unqualified earlier to keep the servicing fees coming in.

According to New York-based law firm Grais & Ellsworth LLP the bill has nothing new in it. It is a variation of the Government’s Bailout package which was aimed was aimed at Four Big banks – Citi, Chase, Bank of America and Wells Fargo. Company also added that bill is not providing the real solutions for borrowers instead lenders are keeping up the principal amounts so that they can increase their revenues from servicing fees.

The company added, The Loan Modification – Safe Harbour Plan, will also affect 401(k) plans, savings accounts and pensions. And as the banks lose vital investors, even stable home buyers may have trouble obtaining financing in the future.

Almost 50% of the loans modified in late 2008 fell into default after only eight months, a trend that experts blame on abusive lender terms.

Home Loan Modification-Bitter Times

Home Loan Modification

It has been rightly said, “He is the happiest, either he is a king or a peasant, who finds peace in his home.”

Recession has engulfed us a little a bit. But I still believe that most of us who have lived below their means have survived comfortably. It was not the fact that I had too little and I couldn’t have afforded a hefty loan but settled for less. I was sure that I don’t have to chase everything that everyone has.

It is a bad time for economy. It has become difficult to repay home loans and everyone is searching for the home loan modification options. Latest news is that home owners who have taken home loans may have a little bit of respite in California.

According to the new state laws, lenders now have to go through additional steps before they can repossess a home. It has resulted in the additional paperwork and processing times of California foreclosures. Therefore, more people have received default notices but the final foreclosure figure has gone down. It is a temporary respite though. You can just possess your property for a little longer.

Lenders are a bit skeptical about the foreclosure process. A total of 54,268 notices of default have been filed last month which is an all time high by a margin of 25.8 percent. Stanislaus County is one of the hardest hit, 311 repossessions have been recorded in the last month alone bringing the two year total up to 12,195. Stanislaus lenders are not going through any good times. They have lost $4 billion dollars in the past two years and over $115 million in the March.

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Laguna Loan Modification, Orange County, CA

Laguna is known for its seven-figure property values, but even upscale

Laguna Beach

residents are feeling the real estate crunch. But you don’t have to risk losing your Laguna Beach home to a short sale or foreclosure. If you’re having trouble managing your mortgage, you can look into loan modification— a change in the terms of your loan designed to help you through financial hardship. In a loan modification, a loan modification attorney talks to the bank’s Loss Mitigation department about lowering your rates and giving you mortgage assistance. He or she has to prove that you are in a crisis and have no other source of financing. Also part of the package is helping you with the paperwork, and sometimes even giving legal foreclosure assistance. Needless to say, choosing a good Laguna Beach loan modification attorney is crucial to your application. No bank will make it easy for you, but with a good Laguna Beach loan modification attorney, you can be sure you’ll get the mortgage assistance you deserve.

Investors Demand Changes in Obama’s Housing Plan

Several mortgage investors have urged the government to amend its $75-billion housing rescue plan. The investors, who collectively hold billions of dollars in securities backed by residential mortgages, said the legislation violates some of their rights and that they are considering legal action.

The investors have met repeatedly with Treasury officials but are still unsatisfied with the plan. According to them, certain measures in the bill prevent them from filing lawsuits against the servicers responsible for collecting payments and granting loan modification. Read more here

First Horizon Loan Modification

First Horizon Loan Modification

First Horizon is a leading financial services company operating in Texas and Tennessee. Established in 1864, it is one of the top 30 bank holding companies in the United States. Like most regional banks, its major products include sub-prime mortgages to less-than-ideal borrowers, and mortgage assistance to help these borrowers stay on track. Many First Horizon borrowers are particularly interested in loan modification. This process involves negotiating better terms with the bank to help them avoid foreclosure. A First Horizon mortgage modification also stops the foreclosure process, giving borrowers enough time to get back on track while working things out with the bank. To qualify for a First Horizon loan modification, one has to prove that he or she has a stable income and a valid reason for falling behind. The latter has to be stated in a hardship letter explaining their financial situation. Valid hardships include medical emergencies, job loss, demotion, military service, or a death in the family. Although it’s technically possible to get a loan modification on one’s own, it’s best to hire a loan modification attorney. A lawyer can ensure faster response from the bank and use lending laws to give the case more leverage. If the mortgage modification isn’t granted, they can also discuss alternatives such as a short sale, forbearance, or deed-in-lieu.