Treasury sets Guidance to Simplify “Short Sales”
Posted by Brian Olenik | Currently 1 Comment »
Here is an important article that I wanted to share with everyone. If you would like more information, please don’t hesitate to contact me. My contact and article source information below.
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NEW YORK (Reuters) – The U.S. Treasury on Monday set long-awaited guidance on a plan for mortgage companies to speed “short sales” of homes and other loan modification alternatives to stem a rising tide of foreclosures.
The Home Affordable Foreclosure Alternatives Program provides financial incentives and simplifies the procedures for completing short sales, a growing practice in which a lender agrees to accept the sale price of a home to pay off a mortgage even if the price falls short of the amount owed, according to an announcement on the Treasury’s website.
Guidelines address barriers that have often sidelined short sales by setting limits on the time it takes a bank to approve an offer, freeing borrowers from debt and capping claims of subordinate lenders.
The incentives, first announced in May, expand on the government’s Home Affordable Modification Program, known as HAMP, that has seen limited success in lowering payments for distressed homeowners. The Treasury earlier on Monday stepped up pressure on mortgage companies to make permanent the 650,000 trial modifications they have started.
Related Posts: Escrow, Financial news, Home Loans, Homeowners, Real Estate News, San Diego, Short Sales
Getting a Loan Could Soon Prove More Difficult
Posted by Rachel LaMar, J.D. | Leave A Comment »
The FHA is looking into making some changes in how they approve insurance policies on home loans, and this may make it harder for borrowers to obtain loans in the future. If you are looking to purchase there is no time like the present.
There are four main components to the proposed changes, including raising minimum down payments and limiting seller contributions to buyer closing costs. To read more please visit http://www.rachellamarrealestate.com/blog/?p=216.
Related Posts: Buyers, Home Loans, Mortgage News, rachel lamar
Great News! Fannie Mae To Allow Up To 10 Financed Properties Again!
Posted by Kevin Kueneke | Currently 2 Comments »
One of the biggest hurdles many solvent investors have had these days is Fannie Mae’s (FNMA) limitation on the number of one- to four-unit financed properties. This limit dropped to four properties over the last year or so, which has hamstrung many investors looking to add to their real estate portfolio.
However, according to FNMA Announcement 09-02, borrowers may now have up to ten financed properties without having to pay the higher rates of private or hard-money resources. In the current lower price and low rate environment, this increased limit is an extremely beneficial change.
For those looking to purchase more properties, this new limit also comes with some new guidelines:
- Minimum credit score is 720
- The borrower(s) cannot have had a bankruptcy or foreclosure in the past seven years
- There can be no mortgage delinquencies (30-days or greater) within the past 12 months on any mortgage loan
- Maximum loan to value is 75% for purchase of a 1 unit second home or investment property
- Maximum loan to value is 70% for purchase of a 2-4 unit investment property
- Full income documentation is required including most recent two-year’s IRS 1040’s
- Refinances are allowed on a no cash-out basis and with a loan to value limit of 70%.
FNMA’s announcement also outlined new reserve requirements:
“When the borrower will own one to four financed properties (including the subject property) the reserve requirements are:
- two months of reserves on the subject property if it is a second home
- six months reserves on the subject property if it is an investment property, and
- two months reserves on each other financed second home or investment property.
When the borrower will own five to ten financed properties (including the subject property) the reserve requirements are:
- two months reserves on the subject property if it is a second home
- six months reserves on the subject property if it is an investment property, and
- six months reserves on each other financed second home or investment property.“
Keep in mind, that a month’s reserve encompasses the total housing expense including principal and interest, property taxes, property insurance, HOA’s, Mello Roos, etc., not just the loan payment.
Now, six months reserves for up to ten properties might seem a little steep, but this is an important step in the continuing effort to rebuild a solid home-ownership base. You want to buy a bunch of property? Then you better be able to show that you can afford to do so. Sounds fair to me.
If you would like to discuss this topic further, please email me at Kevin@MyCWMtg.com
Related Posts: Buyers, CW Mortgage, Financial news, Home Loans, Homeowners, Interest Rates, Mortgage News, Real Estate News
New Conforming Loan Limits Announced For 2009
Posted by Kevin Kueneke | Currently 2 Comments »
After months of speculation, we finally know what the new 2009 high balance conforming loan limits are for San Diego and other “high cost” areas. The Federal Housing Finance Agency (FHFA) said that the $697,500 number we enjoyed for part of 2008 is dropping to $546,250 in San Diego.
Some areas such as Los Angeles-Orange Counties, San Francisco, San Jose, and Santa Cruz are having their 2009 numbers set at the new maximum of $625,500.
According to FHFA’s press release, the 2009 loan limits were calculated using 115% of median house prices as determined by the Federal Housing Administration (FHA) whereas the 2008 loan limits were calculated using 125% of median house prices.
So what does this mean? It means that anyone currently in escrow in San Diego with plans to borrow more than $546,250 needs to do everything they can to get their loan closed before 12/31/2008 or face significantly higher interest rates. There is almost a 2% interest rate difference between loans less than $697,500 and loans greater than $697,500 (also known as true jumbo loans) because conforming loans are guaranteed by the government (FNMA and FHLMC). Guidelines are also more strict for true jumbo loans than for conforming and high balance conforming loans.
As expected, the Federal Housing Administration (FHA) announced that FHA Jumbo limits will match the high balance conforming limits. The Department of Veteran’s Affairs (VA) said that VA Jumbo loans with zero-down payments will be allowed up to the high balance conforming loan limits through the end of 2011. This is good news for FHA and VA buyers as they will still be allowed to take advantage of these programs for higher priced properties.
Any questions or comments? Please email me at Kevin@MyCWMtg.com
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FHA Kiddie Condo…What Is That?
Posted by Kevin Kueneke | Currently 1 Comment »
Many of my referral partners have asked about the FHA “Kiddie Condo” program. I spoke about this several months ago, but now that FHA loans are more prevalent, I felt that it is a good time to revisit the details. Here are a couple questions I have been asked recently:
Question: My child is now attending college and I do not want to throw money away on their rent. Is there a way to buy a property for them to live in without having to pay an enormously high interest rate? Can I avoid a large down payment typically associated with investment properties? 
Answer: Absolutely. FHA allows a non-occupant family member (for example, mom and dad) to go on the loan and basically carry the load. Income and debt from all parties are used to qualify, but the occupying borrower is not required to have any income or assets of their own. As long as your college student does not have credit that would otherwise disqualify them for a loan, their income and assets (if any) are irrelevant. Hence the term “Kiddie Condo”. Better yet, rent the other rooms to your child’s friends to help with cash flow.
Question: My parents are looking to retire and relocate to a new home closer to my family. Unfortunately, their verifiable income is not enough to qualify for a loan, but they do have a small down payment. Since I had planned to help them with their new mortgage payment, can I help them purchase a new home?
Answer: Absolutely. The term “Kiddie Condo” does not just apply to parents helping their children. Adult children can help their parents!
By the way…in addition to condos, all 1-unit properties are eligible: attached and detached single family residences (SFR’s), and homes in a planned unit development (PUD’s).
Far better option than standard Conventional financing due to significantly lower down payment required (3% versus 25-30%) and still get owner-occupied interest rates! **The minimum down payment for FHA loans is going to 3.5% as of January 1, 2009. Still a dramatic difference.
Remember though: these are full documentation loans for all qualifying parties and property condition is important to FHA. At this time, FHA Jumbo loans do not allow a non-occupant co-borrower…so keep your loan amounts under $417,000.
Questions? Call me at (760)500-1919 or email me at Kevin@MyCWMtg.com
Related Posts: Buyers, CW Mortgage, Home Loans, Homeowners, Mortgage News
