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]]> http://www.housingassist.com/ahms/feed/ http://www.housingassist.com/lender/ http://www.housingassist.com/lender/#comments Thu, 11 Feb 2010 20:39:05 +0000 admin http://www.housingassist.com/lender/ A lender is a private or public entity which loans money to borrowers.

Loan Modification is a process whereby a homeowner’s mortgage is modified and both lender and homeowner are bound by the new terms. The most common modifications are lowering the interest rate, reducing the principal balance, ‘fixing’ adjustable interest rates, increasing the loan term, forgiveness of payment defaults & fees, or any combination of these.

• HousingAssist.com will assess  your ability to pay your mortgage through the analysis of wage statements, investment accounts, bank accounts and tax returns, among other data.
• Then we will make a detailed proposal to your lending institutions for restructuring of mortgage terms in a fashion that will enhance the likelihood of repayment.
• HousingAssist.com will negotiate on your behalf.
• We have built strong relationships with all lenders.
• We are also hired by these lenders to help salvage troubled loans.
• Mortgage Companies have an interest in offering concessions to troubled borrowers because of the extremely high cost of foreclosures.
• Lenders do not want to take possession of illiquid real estate, especially in falling markets.

The loan modification plan focuses on people who are behind in their payments or are at risk of default.
Federal officials clarified the definition of “at risk” as those: suffering serious hardships, declines in income or increase in expenses; facing an interest rate hike; having high mortgage debt compared to income; owing more than their house is worth, or demonstrating other reasons for being close to default.
To participate in the loan modification plan, borrowers must:

• have obtained their mortgage before Jan. 1, 2009;
• have a primary mortgage of less than $729,500;
• live in the property;
• fully document their income by providing tax returns and pay stubs;
• sign a statement of financial hardship;
• go for counseling if their total household debt - including auto loans, credit cards and alimony - totals more than 55% of their income.

The modification program will be in effect until the end of 2012, but loans can only be adjusted once.

Call HousingAssist.com Today @ 888-877-0078 for a FREE analysis of your situation.

The flow of California homes entering the foreclosure pipeline slowed in Q409, another sign that the troubles in hard-hit areas are dissipating into more expensive and previously insulated areas, according the MDA DataQuick.

The San Diego-based real estate information service reported 84,568 Notices of Default (NODs) in California in Q409, down 24.3% from 111,689 in the previous quarter. It’s still a 12.4% increase from 75,230 in Q408.

California NODs reached an all-time high in the first quarter of 2009 when MDA DataQuick reported 135,431 filings. That number was inflated because of activity put off from the previous four months. The low came in Q304 at 12,417 filings.

“Clearly, many lenders and servicers have concluded that the traditional foreclosure process isn’t necessarily the best way to process market distress, and that losses may be mitigated with so-called short sales or when loan terms are renegotiated with homeowners,” said John Walsh, DataQuick president.

Ari Afshar of Housing Assist of America, a short sale company in Los Angeles, told HousingWire that short sales are, indeed, picking up.

“We are seeing a huge increase in short sales and this is mainly due to the fact that so many potential modification candidates have been turned down. Being that they would do most anything to avoid a foreclosure, they naturally have been turning to short sales as the next best option,” Afshar said.

Most of the loans that fell into default in Q409 originated in early 2007, but the median origination month was July 2006, the same month for the previous three quarters and even the last quarter of 2008. It means the foreclosure process moved through one month of bad loans in the last year.

“Mid 2006 was clearly the worst of the ‘loans gone wild’ period and it’s taking a long time to work through them. We’re also watching foreclosure activity start to move into more established mid-level and high-end neighborhoods,” Walsh said. “Homeowners there were able to make their payments longer than homeowners in entry-level neighborhoods, but because of the recession and job losses, that’s changing. Foreclosure activity is a lagging indicator of distress.”

The foreclosure tracker RealtyTrac came to the same conclusion in its 2009 in its year-end 2009 Metropolitan Foreclosure Market Report. Although the sand states California, Florida, Nevada and Arizona continue to lead in foreclosure activity, cities like Seattle, Washington and others in Oregon are creeping up the list.

In California, the amount of Trustee Deeds recorded, which reflects how many homes and condos foreclosed, reached 51,060 in Q409, a 2.1% from the previous quarter, according to DataQuick. But despite the uptick in both defaults and foreclosures, foreclosure resales declined to a 40.7% share of the real-estate market, from 42.7% in the previous quarter. It peaked in the first quarter of 2008 with a 57.8% market share.

The top originators of the defaulted loans in Q409 were Countrywide with 5,588 loans; Wells Fargo (WFC: 28.43 -0.07%) at 3,482 loans; and Washington Mutual at 3,460 loans.

By Tami Luhby, senior writerJanuary 23, 2010: 7:25 AM ET

Companies that service the mortgages have until Jan. 31 to review all trial modifications that have been underway for several months under the Home Affordable Modification Program (HAMP), according to a Treasury Department guideline issued late last month. The Treasury Dept. said it would issue new guidelines next week, but wouldn’t give details.

The goal is to clear up the backlog of borrowers stuck in trial modifications, in which a homeowner’s monthly payments are lowered to no more than 31% of pre-tax income.

Some homeowners have spent seven or eight months waiting to hear if they qualify for a permanent adjustment to their mortgages.

This directive, however, has some bank regulators concerned.

“About 450,000 homeowners currently have HAMP trial modifications and have demonstrated a willingness and ability to make timely payments for at least three months,” said Richard Neiman, superintendent of the New York State Banking Department.

“Now, unfortunately and very alarmingly, these same homeowners face the prospect of foreclosure strictly on account of documentation issues,” he said.

Paperwork has proved a major stumbling block for the president’s foreclosure-prevention program. Homeowners complain that their servicers continuously lose the documents they send in, while financial institutions argue that borrowers have not been sending in their paperwork.

Aware of the problem, Treasury officials said they plan to issue new guidance to servicers next week that will help expedite the conversion of borrowers in the trial period to permanent modification. It may also lighten the documentation requirements.

Under fire for the low number of people receiving long-term help, the Treasury Department in late November ramped up pressure on servicers to convert borrowers to permanent modifications.

Some 66,500 people have received permanent adjustments, with another 787,200 homeowners in trial modifications.

Under the president’s plan, delinquent borrowers are put into trial modifications for several months to make sure they can handle the new payments and to give them time to submit their financial paperwork.

Once the modification becomes permanent, servicers, investors and homeowners are eligible to receive thousands of dollars in incentive payments.

Overall, about three-quarters of people are making their payments on time, according to the Treasury Department.

Treasury officials already lightened the documentation requirements in the fall in hopes of speeding up the conversion process. But more needs to be done, Neiman said.

For instance, Treasury should accelerate its implementation of a standardized documentation form and the creation of a Web portal that will allow homeowners to track the receipt of the paperwork, he said. Also, it should allow servicers more flexibility in accepting alternative documents.

If this isn’t done, a lot of homeowners could soon face foreclosure, he said.

“This is a real concern to borrowers, particularly borrowers who’ve continued to make payments for three, four, five, even seven months,” Neiman said. 

Existing home sales plunged in December, falling nearly 17 percent from November in their largest month-over-month drop since record-keeping began. Meanwhile, December’s inventory represented a 7.2-month supply of unsold homes, notably higher than the 6.5-month supply recorded in November, the National Association of Realtors reported Monday. Although the monthly decline was larger than expected, the figures are much less jarring when compared with December 2008. Existing home sales remain 15 percent higher than a year earlier, while raw unsold inventory fell 11 percent from December 2008 to its lowest level since March 2006.

Although the monthly drop-off was steep, it had been expected for some time. Buyers scrambled to close transactions by November to qualify for the $8,000 first-time home buyers’ tax credit, which was originally set to expire at the end of November. The credit–which was later extended through June–worked to juice home sales figures in November at the expense of December. “The collapse in sales simply reflects the bringing forward of transactions to beat the originally planned expiration of the first-time buyer tax credit,” Ian Shepherdson, chief U.S. economist at High Frequency Economics, said in a report. Here’s a look at what the December existing home sales report means for homeowners, home sellers, and home buyers:

[See Getting a Mortgage in 2010: 10 Things to Know.]

For homeowners: Property owners who have watched home values at the national level drop roughly 30 percent from their 2006 peaks will see some optimistic-looking data in the report. First, the national median existing home price increased 1.5 percent, to $178,000, from a year earlier. That’s the first time median home prices have posted an annual gain since August 2007. Home values began stabilizing in the back half of 2009, thanks to increasing demand linked to cheap mortgage rates, more affordable prices, and Uncle Sam’s tax credit. However, the increase in median home prices is also tied the tax credit’s original expiration, which resulted in a larger percentage of sales to higher-end buyers in December, said Patrick Newport, an economist with IHS Global Insight, in a report. “Going forward, prices are likely to fall from December’s level because of rising foreclosures,” Newport said.

How much further will home prices fall? Mark Zandi, chief economist at Moody’s Economy.com, argues that home prices have another 10 percent or so to fall before they hit bottom in the third quarter of 2010.

[Also see Expanded First-Time Home Buyer Tax Credit Becomes Law.]

For home buyers: Those looking to purchase a home this year should be encouraged by the report, which signals that buyers will at least retain leverage in the real estate market through the spring season. Buyers already have a number of things going for them. The tax credit has been extended and expanded to include even current homeowners who close a transaction by the end of June. Thirty-year, fixed mortgage rates fell below 5 percent for the week ending January 21. And the housing bust has dragged home prices down to more affordable levels and reduced the risk of another crash. “You never know 100 percent whether you are at the bottom in prices, but prices are very stable right now,” said Zach Pandl, an economist at Nomura Securities. “Low prices, low mortgage rates, and stable price expectations are major positives and probably more important fundamentally than the first-time home buyers tax credit.”

But would-be home buyers should keep their eyes on mortgage rates, which are likely to head higher as the year progresses. The Fed was able to pull rates on 30-year fixed mortgages to historic lows by launching a program to buy up debt and mortgage-backed securities from Fannie Mae and Freddie Mac. The program, however, is slated to expire at the end of the first quarter. And if private buyers don’t step in, mortgage rates could increase significantly, perhaps by a half a percentage point, to 5.50 percent. But Pandl isn’t overly worried about this potential to drive rates higher because the Fed could always decide to buy more securities if need be. “[The Fed is] exiting the market but they also have been hinting that they can return if mortgage rates rise too high,” Pandl said. “And that’s a very credible [possibility] because they have bought so many [mortgage backed securities].”

For home sellers: Although home sales should rise from December’s depressed levels, those looking to sell property this spring will still have to have to work for it, said Guy Cecala, the publisher of Inside Mortgage Finance. “[Home sellers] should feel probably better than last year, but it was so bad last year that that’s not a real fair comparison,” Cecala said. “Anything is going to look better probably in the first half of this year than it did last year.” That means home sellers will have to price their home aggressively, ensure the property is in tip-top condition, and be willing to entertain offers that aren’t quite as strong as they would like. “I don’t think anybody is going to be raising their prices,” Cecala sad.

By Les Christie, staff writerJanuary 20, 2010: 9:45 AM ET

Even refinancing a mortgage for their fancy digs or getting a new loan can be near impossible these days thanks to skittish lenders. And the higher the loan value, the more they worry.

“It’s amazing really,” said Susan Bruno, a financial planner with Beacon Wealth Consulting in Rowayton, Conn., “but it makes sense when you think about it.”

For one thing, many rich folks have fallen behind on their loans. About 12% of U.S. mortgages of $1 million and larger were late this fall, twice the rate for loans under $250,000 and nearly triple the default rate on million dollar mortgages 12 months earlier, according to First American CoreLogic Inc., a California-based research firm.

It was so simple to get jumbo loans just a few years ago. The wealthy barely had to pay a 0.2 percentage point premium over a conforming loan, according to Keith Gumbinger of HSH Associates, a publisher of mortgage information.

Lenders made the loans more expensive because they are too large to be bought or backed by the government through Fannie Mae and Freddie Mac. Today the increased risk is worth about 0.8 percentage points, although that is down from the high of about 1.8 points in late 2008.

“The pendulum has swung from one extreme to the other. Banks are going overboard,” said Lyle Benson, a financial planner and member of the executive board of the American Institute of Certified Public Accountants.

That includes asking the affluent for down payments well in excess of the traditional 20%, according to Bruno. Some lenders want loan-to-value ratios to be closer to 60%, even 50%, which means putting 40% or 50% down. Or, on a million-dollar home, having $500,000 ready to hand over.

And all the other underwriting aspects of the loan have to be in place as well, something that can be difficult to demonstrate with some wealthy clients, whose income and assets can be complicated.

One client of Benson’s, with $8 million in assets, wanted to refinance the mortgage on his primary residence.

A self-made man, he had sold a business and put much of the proceeds in a charitable remainder unitrust that paid him $150,000 a year. He took paper losses in his stock portfolio against that income, however, which lowered his taxable income. The cash flow stayed intact but the income he showed was much lower.

“The loan officer didn’t understand it,” said Benson, “and the bank declined the loan.”

Susan Bruno has a client who was turned down for a mortgage twice — despite an 800 credit score, more than adequate down payment and plenty of income.

The problem was that the client wanted to buy a second home. And because the client would not, could not, swear that he would occupy the home at least 75% of the time, lenders weren’t interested.

“Mortgages for second homes have been tough to get the past couple of years,” said Gumbinger. “A lot of second-home areas, like in Florida and Arizona, are among the most challenging markets.”

Plus, defaults on second-home mortgages are often handled differently than those of primary homes. The mortgage balances, for instance, can be reduced in bankruptcy court — “crammed down” in industry parlance — to their market values. That can wipe out a good portion of what borrowers owe, which banks hate. As a result, they often require a 50% down payment for second homes.

All in all, the wealthy simply have financial problems that we ordinary mortals can only dream of. Take the doctor client of Bruno’s with a home on 19 expensive acres of Connecticut countryside. He had more land than he needed and some time ago toyed with the idea of subdividing and selling it off.

Well, the market changed and he shelved the idea — but only after taking some preliminary steps. Last year, when he tried to refinance his mortgage, this rose up to bite him. His bank wouldn’t count the sub-dividable land, worth $8 million, as collateral because it was now a separate parcel.

“[His bank] only counted the house and a small piece of land,” said Bruno. “His lenders limited him to a loan of $1.3 million.”

For Bruno, that’s part of a trend of lenders falling back on rules and guidelines that make little sense sometimes when dealing with the individual cases presented by some high net-worth individuals.

“There’s no appropriate business judgment these days,” she said.

Aren’t you glad you’re not rich?