Loan Modification

FHFA revises HARP to help more borrowers

January 8, 2012

The Federal Housing Finance Agency, along with Fannie Mae and Freddie Mac,  announced changes to the Home Affordable Refinance Program (HARP) to help more borrowers.

The program will continue to be available to borrowers with loans sold to Fannie Mae and Freddie Mac on or before May 31, 2009, with current loan-to-value (LTV) ratios above 80 percent.

The new program enhancements address several other key aspects of HARP including:

-Eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers
-Removing the current 125 percent LTV ceiling for fixed-rate mortgages backed by Fannie Mae and Freddie Mac
-Waiving certain representations and warranties that lenders commit to in making loans owned or guaranteed by Fannie Mae and Freddie Mac
-Eliminating the need for a new property appraisal where there is a reliable AVM (automated valuation model) estimate provided by the Enterprises
-Extending the end date for HARP until Dec. 31, 2013, for loans originally sold to the Enterprises on or before May 31, 2009.

Fannie and Freddie plan to issue guidance with operational details about the HARP changes to mortgage lenders and servicers by Nov. 15. Since industry participation in HARP is not mandatory, implementation schedules will vary as individual lenders, mortgage insurers and other market participants modify their processes.

: Loan Modification, Real Estate News, San Diego Real Estate
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Taskforce created to combat HAMP scams

December 8, 2011

The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), the Consumer Financial Protection Bureau (CFPB), and the U.S. Department of the Treasury today announced the creation of a joint task force to combat scams targeted at homeowners seeking to apply for the Home Affordable Modification Program (HAMP). The joint task force today issued a consumer fraud alert to protect homeowners from HAMP-related mortgage modification scams.

If you are struggling to pay your San Diego mortgage and are seeking a mortgage modification, keep the following tips in mind:

 You can apply to the federal Home Affordable Modification Program (HAMP) on your own or with free help from a housing counselor approved by the U.S. Department of Housing and Urban Development (HUD). Applying to the program is always FREE. For more information on how to apply, call the Homeowner’s HOPE™ Hotline at 1-888-995-HOPE (1-888-995-4673) or visit www.MakingHomeAffordable.gov.

 Only your mortgage servicer has discretion to grant a loan modification. Therefore, no third party can guarantee or pre-approve your HAMP mortgage modification application.

 Beware of anyone seeking to charge you in advance for mortgage modification services – in most cases, charging fees in advance for a mortgage modification is illegal.

 Paying a third party to assist with your HAMP application does not improve your likelihood of receiving a mortgage modification. Accordingly, beware of individuals or companies that ask you for payment and tout success rates or claim to be “experts” in HAMP.

 If an individual or company claims to be affiliated with HAMP or displays a seal or logo representing the U.S. government in correspondence or on the Web, you should check the connection by calling the Homeowner’s HOPE™ Hotline.

 Beware of individuals or companies that offer money-back guarantees.

 Beware of individuals or companies that advise you as

Sourced from SIGTARP.GOV

: Fraud Awareness, Loan Modification
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Troubled San Diego homeowners get a lifeline with HARP

November 26, 2011

The government is changing its Home Affordable Refinance Program (HARP), making it easier for homeowners to refinance their underwater, high-interest mortgages.

Although HARP has helped more than 890,000 homeowners nationwide by reducing their monthly mortgage payments, there are still millions of homeowners who are too far underwater to participate.

Under the new rules, homeowners who owe more than 125 percent of the market value of their homes will be allowed to refinance into new loans.

The program also streamlines the refinancing process for homeowners who are current on their mortgage payments and reduces or removes fees that previously hindered them from refinancing.

Fannie Mae and Freddie Mac also will reduce the fees they charged in the past to enable borrowers to better afford the new loans.  Among the fees that will be reduced or eliminated are those for appraisals, title insurance, and closing costs.

Fees also will be waived for some underwater borrowers who are refinancing into 20-year or shorter-term loans.
HARP is only open to borrowers who are current on their payments for the past six months with no more than one missed payment in the past 12 months.  The loans must have been originally issued before May 31, 2009, and purchased by Fannie Mae or Freddie Mac.

: Loan Modification, Mortgages, Real Estate News, Short Sale
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Government Releases Additional HARP Guidance For Underwater Homeowners

November 16, 2011

Making Home Affordabie

Tuesday, Fannie Mae and Freddie Mac unveiled lender instructions for the government’s revamped HARP program, kick-starting a potential refinance frenzy across California and nationwide.

HARP stands for Home Affordable Refinance Program. The updated program is meant to give “underwater homeowners” an opportunity to refinance at today’s low mortgage rates.

In the two-plus years since its launch, HARP’s first iteration helped fewer than 900,000 homeowners. HARP II, by contrast, is expected to reach millions.

Lenders begin taking HARP II loan applications December 1, 2011.

To apply for HARP, applicants must first meet 4 basic criteria :

  1. The existing mortgage must be guaranteed by Fannie Mae or by Freddie Mac
  2. The existing mortgage must have been securitized by Fannie Mae or Freddie Mac prior to June 1, 2009
  3. The mortgage payment history must be perfect going back 6 months
  4. The mortgage payment history may not include more than one 30-day late payment going back 12 months 

If the above criteria are met, HARP applicants will like what they see.

For HARP applicants, loan-level pricing adjustments are waived in full for loans with terms of 20 years or fewer; and maxed at 0.75 for loans with terms in excess of 20 years.

This will result in dramatically lower mortgages rates for HARP applicants — especially those with credit scores below 740. Some applicants will find HARP mortgage rates lower than for a “traditional” conventional mortgage.

In addition, HARP applicants are exempted from the standard waiting period following a bankruptcy or foreclosure, which is 4 years and 7 years, respectively.

These two items are inclusionary and should help HARP reach a broader U.S. audience.

HARP contains exclusionary policies, too.

  1. The “unlimited LTV” feature only applies to fixed rate loans or 30 years or fewer. ARMs are capped at 105% loan-to-value.
  2. Applicants must be “requalified” if the proposed mortgage payment exceeds the current payment by 20%.
  3. Applicants must benefit from either a lower payment, or a “more stable” product to qualify

And, of course, HARP can only be used once. 

Fannie Mae and Freddie Mac will adopt slight variations of the same HARP guidelines so make sure to check with your loan officer for the complete list of HARP eligibility requirements.

: Loan Modification, Mortgage Guidelines
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Tips for Avoiding Advanced Fee Schemes

November 3, 2011

An advance fee scheme occurs when the victim pays money to someone in anticipation of receiving something of greater value—such as a loan, contract, investment, or gift—and then receives little or nothing in return.

The variety of advance fee schemes is limited only by the imagination of the con artists who offer them. They may involve the sale of products or services, the offering of investments, lottery winnings, “found money,” or many other “opportunities.” Clever con artists will offer to find financing arrangements for their clients who pay a “finder’s fee” in advance. They require their clients to sign contracts in which they agree to pay the fee when they are introduced to the financing source. Victims often learn that they are ineligible for financing only after they have paid the “finder” according to the contract. Such agreements may be legal unless it can be shown that the “finder” never had the intention or the ability to provide financing for the victims.

Tips for Avoiding Advanced Fee Schemes:

If the offer of an “opportunity” appears too good to be true, it probably is. Follow common business practice. For example, legitimate business is rarely conducted in cash on a street corner.

  • Know who you are dealing with. If you have not heard of a person or company that you intend to do business with, learn more about them. Depending on the amount of money that you plan on spending, you may want to visit the business location, check with the Better Business Bureau, or consult with your bank, an attorney, or the police.
  • Make sure you fully understand any business agreement that you enter into. If the terms are complex, have them reviewed by a competent attorney.
  • Be wary of businesses that operate out of post office boxes or mail drops and do not have a street address. Also be suspicious when dealing with persons who do not have a direct telephone line and who are never in when you call, but always return your call later.
  • Be wary of business deals that require you to sign nondisclosure or non-circumvention agreements that are designed to prevent you from independently verifying the bona fides of the people with whom you intend to do business. Con artists often use non-circumvention agreements to threaten their victims with civil suit if they report their losses to law enforcement.

Travis Breton and Summit Realty Group believe that a large portion of fraud and scams can pe prevented simply by creating an public awareness of how fraud can be commited.

Information provided by fbi.gov

: Fraud Awareness, Loan Modification
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The Government’s Revamped HARP Program For Underwater Homeowners

October 25, 2011

Making Home AffordabieThe Federal Home Finance Agency announced big changes to its Home Affordable Refinance Program Monday. More commonly called HARP, the Home Affordable Refinance Program is meant to give “underwater homeowners” opportunity to refinance.

With average, 30-year fixed rate mortgages still hovering near 4.000 percent, there are more than a million homeowners nationwide who stand to benefit from the program overhaul.

To qualify for the re-released HARP program, you must meet 4 basic criteria :

  1. Your existing home loan must be guaranteed by Fannie Mae or Freddie Mac
  2. Your home must be a 1- to 4-unit property
  3. You must have a perfect mortgage payment history going back 6 months
  4. You may not have had more than one 30-day late payment on your mortgage going back 12 months 

Most notable about the new HARP refinance program, though, is that the government is waiving loan-to-value requirements on a HARP loans. Homeowners’ participation in the program  are no longer restricted by their home’s appraised value. In fact, the new HARP doesn’t even require an appraisal, in most instances.

With the new HARP program, underwater mortgages can be refinanced without LTV limit or penalty.

According to the government’s press release, pricing considerations for the new HARP program will be released on or before November 15, 2011; and lenders are expected to be offering the program as of December 1, 2011.

If you think you may be eligible, first confirm that either Fannie Mae or Freddie Mac is backing your loan. Both groups provide a simple, online lookup.

If your loan cannot be located on either of these two sites, your current mortgage is not backed by Fannie Mae or Freddie Mac, and is not HARP-eligible.

The FHFA’s official press release contains an FAQ section. In it, you’ll find minimum qualification standards, as well as information related to condominiums and to mortgage insurance.

The HARP program is meant to help a wide group of homeowners, but each applicant’s situation is unique. For specific HARP questions, be sure to talk with a loan officer.

: Loan Modification, Mortgage Guidelines, Short Sale
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California expands ‘Hardest Hit’ eligibility for distressed homeowners

August 23, 2011

California has expanded the pool of borrowers who could qualify for three programs aimed at helping families at risk of losing their homes, by making those who tapped their home equity or who took out loans after Jan. 1, 2009, eligible for assistance.

The California Housing Finance Agency (CalHFA) is administering nearly $2 billion in federal “Hardest Hit” funds, a $4.1 billion program targeted at states with high foreclosure rates or unemployment.

CalHFA is using the Hardest Hit fund to provide four “Keep Your Home California” programs. More than 2,000 homeowners are in the process of receiving help since the programs launched in February, CalHFA said in announcing expanded eligibility requirements for three of those programs.

With the U.S. Treasury signing off on the changes, CalHFA said eligibility requirements are being expanded for:

• The Unemployment Mortgage Assistance Program (UMA), which provides a mortgage payment subsidy of up to $3,000 a month for six months for unemployed homeowners in imminent danger of foreclosure. • The Mortgage Reinstatement Assistance Program (MRAP), which provides up to $15,000 per household for homeowners who have fallen behind on their mortgage payments due to a temporary change in household circumstance. • The Transition Assistance Program, which provides relocation assistance in conjunction with a short sale or deed-in-lieu of foreclosure.

Borrowers who took out loans after Jan. 1, 2009, or who tapped into their home’s equity by refinancing or opening a home equity line of credit, were previously excluded from those programs.

Homeowners who were previously disqualified for one of these reasons are being contacted and offered an opportunity to reapply, CalHFA said. They are also being invited to contact the Keep Your Home California call center at (888) 954-5337.

A fourth “Keep Your Home California” initiative, the Principal Reduction Program (PRP), provides funding to reduce outstanding principal balances for qualifying borrowers with negative equity, often in conjunction with a loan modification.

To qualify for any of the four programs, borrowers must own and occupy the home as their primary residence, meet income limits, and face a documented financial hardship.

Loan servicers participating in all four programs are GMAC, Guild Mortgage, CalHFA and California Department of Veterans Affairs. Other servicers, including Bank of America, JPMorgan Chase, CitiMortgage and Wells Fargo are participating in some, but not all of the programs.

By Inman News

: Home Selling Tips, Loan Modification, Short Sale
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Are You Eligible For Principal Reduction

August 10, 2011

The Keep Your Home California program is a federally funded principal reduction program designed to help low and moderate income California homeowners struggling to pay their mortgages. California has recently received nearly $2 billion in federal funding and is working with housing counselors, servicers and housing advocates to provide assistance that will help prevent avoidable foreclosures and keep Californians in their homes.

The Keep Your Home California program is designed to help California homeowners who are facing foreclosure to retain their homes if they have suffered a financial hardship. In order to apply, your financial situation must meet these requirements.

•Are You Low or Moderate Income? Check this Income Table and match the county you live in with your household income. Your gross family income should be less than or equal to the amount shown.

•Have You Suffered a Financial Hardship? To be eligible, you must be experiencing a financial hardship that puts you at risk of default due to changes in household circumstance such as a death in the family, illness, disability, unemployment or loss of income.

Click here to determine if your property and mortgage meet the basic eligibility guidelines for the Keep Your Home California program.

If you do not meet the eligibility guidelines for the Keep Your Home California program, then a short sale of your home may be the best alternative. Contact Us today to see if a short sale is right for you.

: Home Selling Tips, Loan Modification, Real Estate News, Short Sale

How to Spot Mortgage Repair Fraud

April 9, 2011

As the San Diego real estate market struggles to recover from our current economic challenges, many homeowners are still desperate for quick fixes, which makes them very vulnerable to mortgage repair fraud.

Generally, these scams take advantage of media coverage of federal programs, and they target those who are already struggling to pay their mortgage or are anxious to sell their San Diego homes. Being able to recognize the most common types of mortgage repair fraud can help you avoid becoming a victim.

1) Automatic Refunds – A company charges several thousand dollars for loan modification services. They do no work on the file but automatically send a refund check to consumer for a couple hundred dollars. They pocket the remaining money, saying they “tried” to get a loan mod but the bank rejected them. No one complains because the company “tried” and the consumer received a partial refund.

2) Double Escrows – A company tells the bank they have a San Diego short sale buyer at a low price in order to get appraisal. They don’t tell anyone that they have a second buyer lined up to buy the house once the short sale goes through. They set up escrow and closing for the same day on both deals. Bank gets cheated on the original San Diego short sale since it is not legitimate, and the scammers make a profit on the second deal as well.

3) Principal Reductions – These are companies guaranteeing or advertising they can get you a principal reduction. Most lenders will not agree to a principal reduction, but scammers use this as an advertising ploy to get your money and your business.

4) Phantom Investor Purchase – This occurs when scammers falsely claim they have investors willing to purchase your house from the bank and then resell it back to you at a reduced mortgage. The investor pools usually do not exist, and the scammer is taking your money up front but not providing you any real assistance.

Remember, if it sounds too good to be true, it probably is. Don’t be pressured into signing or paying. Don’t believe anyone who tells you not to contact your lender or instructs you to pay them, instead of your lender. For legitimate, FREE help, call toll- free 877-448-4692 to get assistance from a HUD-approved, non-profit housing counselor.

: Loan Modification, Real Estate News, Short Sale
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Tips to Avoid Loan Modification Scams

October 13, 2010

Loan modification can work in the right circumstances, but unfortunately, numerous scams have taken hold to trap unwary and desperate San Diego homeowners. Examples of scams include lease back or purchase arrangement where the homeowner is asked to sign over their deed to a third party “investor” to fake government modification programs.

Here are some tips from a Foreclosure Prevention Task Force:

1. Contact your lender or mortgage servicer first.

2. Make all payments directly to your lender or servicer. Do not trust anyone to make the payment for you.

3. If you need help, contract a reputable non-profit housing or financial counselor, such as HUD or the Homeowner Preservation Foundation.

4. Know what you are signing and get legal advice before signing documents you don’t understand.

5. Get everything in writing.

6. Report suspicious activity.

Looking for news on the latest scams and frauds? http://www.californiarealestatefraudreport.com/

: Loan Modification, San Diego Real Estate
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