Danny Salas

Archive for the 'Mortgage Industry Updates' Category

Check Your New Temporary FHA Loan Limits

Temporary Loan Limits Return for all FHA Loans in High Cost Areas 

Recently, the President signed into law a new bill H.R. 2112, called the Consolidated and Further  Continuing Appropriations Act of 2012. In response to this new legislation, HUD has issued Mortgagee Letter 2011-39 detailing the acceptance and timing of the return to higher FHA loan limits.

Visit HUD’s FHA Mortgage Limits webpage for a simple way to find out your loan limits

 

Effective Case Numbers (Based on case assignment date)	Loan Limit
10/1/2011 to 11/17/2011	Lower Limits that were in effect from October 1, 2011 through November 17, 2011 unless they meet the criteria for exceptions to those loan limits as set forth in Mortgagee Letter 11-29 for: Mortgages with credit approval on or before September 30, 2011 FHA-to-FHA Refinance transactions
11/18/2011 to 12/31/2011	Loan Limits in effect from January 1, 2011 through September 30, 2011 per Mortgagee Letter 10-40 and reiterated in Mortgagee Letter 2011-39
1/1/2012 to 12/31/2013	Loan Limits in effect for January 1, 2012 through December 31, 2013 per Mortgagee Letter 10-40 and reiterated in Mortgagee Letter 2011-39

 

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Ins and Outs of the New HARP Loans

 

Home Affordable Refinance Program (HARP)

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Listen to Real Estate Today Radio with Daniel Salas on the new guideline changes for these loans and how it affects borrowers.

Local Market Segments with Daniel Salas. Sundays from 11am to 1pm.

Read the article: http://accessloans.net/2011/11/22/clearing-up-confusion-on-harp-loans/

 

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Clearing up Confusion on HARP Loans

Freddie Mac and Fannie Mae have adopted changes to the Home Affordable Refinance Program (HARP) and you may be eligible to take advantage of these changes.

If your mortgage is owned or guaranteed by either Freddie Mac or Fannie Mae, you may be eligible to refinance your mortgage under the enhanced and expanded provisions of HARP. 

To see if your home loan is serviced by Fannie Mae, go to:  http://www.fanniemae.com/loanlookup/  

To see if your loan is currently serviced by Freddie Mac go to:  www.freddiemac.com/mymortgage

See the Federal Housing Finance Agency’s News Release on HARP changes go to:  http://accessloans.net/2011/10/24/harp-changes-to-reach-more-borrowers/

 

Clearing Up (or Causing More) Confusion on HARP Loans

The Federal Housing Finance Agency (FHFA) recently announced changes to the Home Affordable Refinance Program (HARP) to assist more home owners with the ability to refinance their homes, and save themselves from foreclosure.  While this announcement has grabbed the attention of the news media and the public, it needs to be understood that this is an update to HARP, not an introduction to HARP.  These loans have been in place for years; however, the guidelines have been updated to assist more borrowers with more opportunities than we have experienced in the past.  However, eligibility for these loan programs will not start until December 1, 2011, and it may take time for the GSE’s (Fannie Mae and Freddie Mac) to get contracts solidified with individual banks.  So patients, regarding true availability of these loan programs, must be expected. 

HARP, consists of Fannie Mae and Freddie Mac loans whereby borrowers may refinance their existing mortgage, lower the interest rate, and therefore payments, even if they were under water or had no equity in their homes.  Old guidelines enabled people to refinance up to 125% of their homes’ value, while new guidelines will not limit the loan to value…so, you, potentially, could refinance a $200,000 loan, even if your home is worth $100,000.

Also, with the old guidelines, you were limited to 105% of the value of your home, if you had a second mortgage, that was going to stay on the home, and the two loans combined could not exceed 125% of the value of the home.  This has changed as well. 

Fannie Mae participates in HARP via a loan called “RefiPlus.”   Freddie Mac participates in HARP via a loan called, “Open Access.”  Fore simplicity purposes, I will discuss Fannie Mae’s RefiPlus program, however, similar rules follow Freddie Mac’s Open Access’ eligibilities. 

One of the biggest changes is the cost of these loans.  Here’s what needs to be understood:  With risk, there’s cost.  For example, if someone is buying an investment home, that’s a riskier loan for the GSE’s to sell, so they are more expensive loans.  You can pay those fees up front, or you can increase the interest rate on that loan, absorbing all, or a portion, of the additional fees.  Same thing with these HARP loans!  If you have no equity, it’s riskier for the bank, and therefore, the GSE’s would charge more money, when you delivered the HARP loans to them…and therefore, the bank would pass those fees onto the consumer.  What the Enhanced HARP Guidelines have done, is lower those delivery fees, so that it can benefit more people by keeping those costs, and therefore interest rates, down. 

In the past you couldn’t be late on any mortgage payment, in the past twelve months to qualify.  Now, it’s going to just be the past six months.  If your payment is increasing by 20% (from an adjustable to a fixed rate mortgage) you must meet other guidelines in order to be eligible, but you still may be eligible.  If you have had a bankruptcy or foreclosure, you may not have to wait the traditional four to seven years, in order to be eligible.  If your loan amount is greater than 80% of the value of your home, the maximum amount of increased cost, or delivery fees, to the GSE’s will be .75% Points.  A fraction of what we’ve seen in the past.  These fee changes will not go into effect for loans delivered to the GSE’s until January 1, 2012. 

So, you’ll notice that the application dates, for eligibility are December 1, 2011; however, the delivery of these loans to the GSE’s are January 1, 2012.  These dates aren’t too far apart; however, you’ll notice that they are particular, regarding when you make take an application, qualify for the new program, qualify for the lower fees associated with the enhanced program, and delivery of that loan to the GSE’s.  All of these particulars must be hashed out behind the scenes, before eligibility for consumers may be taken advantage of.  Banks need to have their internal guidelines changed, to accommodate, and educate their underwriters, staff, etc., on qualifying and delivering these loans in an appropriate manner. 

So, the changes are coming, however, we must be patient.  This IS an opportunity that should increase more HARP volume, and save more Americans from foreclosure.

 

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HARP Changes to Reach More Borrowers

News Release obtained from http://www.fhfa.gov/webfiles/22721/HARP_release_102411_Final.pdf

FEDERAL HOUSING FINANCE AGENCY News Release: 10/24/11

 

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