Smart Borrower Blog

Archive for the ‘Federal Loans’ Category

Obama Announces New Mortgage Refinance Aid

On Wednesday, President Barack Obama announced some modifications to his administration’s previous foreclosure-prevention plans in hopes of extending relief to more struggling homeowners. “I am sending Congress a plan that will give every responsible homeowner in America a chance to save about $3,000 a year on their mortgage by refinancing at historically low rates,” he told an audience in Falls Church, VA as quoted in a New York Times article. “No more red tape. No more runaround from the banks.” The President did admit that previous efforts have been less effective than expected, but he said this new round of... more »

Lawmakers Plan to Raise FHA Loan Limits Again

Congressional and senate lawmakers are seeking to raise FHA mortgage loan limits. Originally, FHA loan limits were raised during the housing crisis in 2009. As private lenders high-tailed it out of the market and government-backed agencies were left to pick up the mortgage lending slack, loan limits for loans backed by Fannie Mae and Freddie Mac were temporarily raised as well. In New York, Los Angeles, and San Francisco, where home prices were above the $625,000 loan limits, Congress temporarily raised the loan imits to $729,750 due to the expensiveness of an area. This raise aimed to help people who... more »

Fannie Mae Offers Incentives to Buy Foreclosed Homes

In an attempt to knock down its rising stockpile of foreclosed properties, mortgage finance company Fannie Mae is now offering incentives to both buyers and real estate agents who take these homes off the market. For eligible properties, the government-run entity will give homebuyers up to 3.5 percent of the purchase price for closing costs, as long as they plan to live in the home, not rent it or flip it. What’s more, buyers could be eligible for mortgage and renovation financing, which gives them the opportunity to pay just a 3 percent down payment. The agents representing these buyers... more »

Cost of FHA Loans Set to Rise

Ever since the housing market bubble burst, FHA loans have been in high demand. With tighter lending standards in place for conventional loans, more people have no other option other than an FHA backed mortgage. While FHA loans are still only made available to credit worthy applicants, the criteria is not quite as stringent. Applicants need only put 3.5 percent for a down payment, making these loans in reach for many first-time homebuyers. Due to the high demand of these loans, the FHA has eaten through their reserve funds. What is supposed to be a 2 percent reserve cushion has... more »

Demand Falls as Mortgage Rates Jump

Mortgage interest rates jumped up this week, according to the Mortgage Bankers Association , and as a result home loan applications took a dive, a sign that the housing market is not reviving on pace with the rest of the economy. The MBA reported that the average rate on a 30-year fixed rate mortgage broke the 5 percent barrier this week, moving up to 5.13 percent from 4.81 percent the week before. That is the highest rate in almost 10 months. As rates increased, demand for mortgages slowed with the MBA seasonally adjusted mortgage application index falling 5.5 percent. “Mortgage... more »

First-Time Home Buyer Tax Credit Extended for Veterans

If you or your spouse is a member of the armed forces and has recently served active duty outside of the US for at least 90 days between January 1, 2009 and April 30, 2010, you could still qualify for a first-time Home Buyer Tax Credit of up to $8,000. Using the tax credit in conjunction with a VA loan could save you even more. If you are unfamiliar with VA loans, they are home loans that are available to active military personnel, veterans and their spouses. VA loans are typically serviced through a mortgage provider who specializes in the... more »

Is FHA Trying To Force Private Lenders Back into the Market?

A recent article on CNBC reported that it looks as if the Federal Housing Administration (FHA) is trying to downsize its share of the mortgage market these days. Over the past year, loans sponsored by the government have made up almost half of all new loans. That is mainly a result of all the tightened lending standards that private banks have adopted in the wake of the housing meltdown. FHA loans are some of the only programs left that don’t require much of a down payment or absolutely perfect credit. But it’s not necessarily very healthy for the government to... more »

Fitch: Most Loan Modifications Will Fail

As many as 75 percent of all mortgages modified through the government’s Home Affordable Modification Program (HAMP) will go into deafult again within 12 months, according a new report from Fitch Ratings. Why aren’t the modifications enough for these borrowers? Fitch says its a matter of being overloaded with other debts as well. “Many of these borrowers still have very heavy levels of other debt,” said Diane Pendley, a Fitch managing director, as quoted in a CNN article “auto loans, credit cards and other expenses. The HAMP modifications reduce housing expenses down to 31% of income but do not touch... more »

Trial Loan Modifications Spur Lawsuit Against JPMorgan Chase

JPMorgan Chase is being sued again by angry homeowners. Three Queens, New York residents, who were recipients of trial mortgage modifications under Obama’s Home Affordable Modification Program, have filed a suit against Chase for reneging on its promises to convert those loans into permanent payment modifications. Alex Lam, 35, Shanaz Begum, 40, and Tamara Williams, 39 are being represented by the Urban Justice Center and all claim Chase denied them permanent mortgage modifications even though they were eligible under HAMP rules. In the case of Alex Lam, he was told by his bank last year that he needed to miss... more »

FHA Increases Upfront Mortgage Insurance Premium for Buyers

If you’re looking for a house, and thinking about getting an FHA loan, you might want to apply before April 5, 2010. That’s the date the FHA is raising its upfront mortgage insurance premium (UFMIP) on all FHA loans and your FHA case number will have to be assigned before that date in order to qualify at today’s lower UFMIP rates. Actually, you’ll need to get in touch with a lender a few days before April 5th, as you’ll need an FHA case number assigned and that can take several days, depending on your lender. What is an FHA Loan?... more »