Archive for 'home loans'

The Federal government has recently changed its guidelines on refinancing.

Homeowners who are “underwater” in regards to value in their homes can now also take advantage some of the lowest rates in 60 years, regardless of your appraised value or loan amount.

The Federal Housing Administration will reduce mortgage fees significantly for borrowers who qualify for the FHA’s streamline refinance program, after June 11, 2012.
Since the financial crisis of 2008, more than 750,000 borrowers have refinanced their mortgages through FHA’s streamline program, according to data from the Department of Housing and Urban Development. More than half of those refinances took place in 2009 after the housing and mortgage markets collapsed.
But rising mortgage insurance premiums on FHA loans have become an obstacle for many homeowners who want to refinance. Depending on the size of the loan, the fees can eat up much of what the borrower would save through the refinance. FHA asserts that lowering the MIP rates for streamline refinances will not incur taxpayer expenses or jeopardize its mutual mortgage insurance fund.
In this streamline program, the FHA asks for limited documentation from borrowers and doesn’t require an appraisal of the home. The no-appraisal rule allows owners to refinance even if they owe more on their mortgages than their houses are worth.
The lower fees go into effect June 11 and will be available to borrowers who refinance loans that were endorsed by the FHA before June 2009. FHA estimates that there are approximately 3.4 million households with qualifying FHA mortgage loans with mortgage rates over 5 percent.
The average household could save about $250 per month or $3000 annually using streamline refinancing.
Acting FHA commissioner Carol Galante remarked that lowering the insurance premium rates for streamlining FHA mortgages “is one way that FHA can help homeowners who are doing the right thing, paying their bills on time and who want to take advantage of today’s low interest rates.”
The program is providing an inexpensive method of refinancing, which can prevent foreclosures and provide homeowners with additional cash for paying bills and meeting essential household expenses.
The FHA Streamline Refinance is a unique mortgage product, available to homeowners with existing FHA home loans only. The program was built to be the fastest, simplest way for an FHA-insured homeowners to refinance their respective mortgages. The FHA Streamline Refinance’s big attraction is the leniency of its underwriting standards.
But In Order to Qualify, You Must Meet This Criteria…
    Your current FHA mortgage must have been assigned before May, 2009
    You must be current on your mortgage and not been late over the last 12 months consecutive.
If you meet these two criteria, you may be FHA Streamline-eligible and below are a few other items to consider,
If you had a bankruptcy, you are most likely eligible, but please call expert Loan officers and other mortgage professionals for more information about your particular situation.
There are many options available, including a “no-closing cost” option where you won’t have to come out of pocket for the refinance.
And remember: you may “not” need an appraisal to qualify.
The Federal Housing Administration will reduce mortgage fees significantly for borrowers who qualify for the FHA’s streamline refinance program. Again, the lower fees go into effect June 11 and will be available to borrowers who refinance loans that were endorsed by the FHA before June 2009.
The new, lower fees will make streamline refinances much more feasible to borrowers, as some estimates when the new fees take effect will be, a borrower refinancing $200,000 will pay $20 — instead of $3,500 — in upfront mortgage insurance. The borrower also will pay about $92 — instead of $208 — per month for annual mortgage insurance.
That’s because the FHA reduced the upfront mortgage insurance premium for eligible homeowners to 0.01 percent of the total loan and the annual premium to 0.55 percent of the loan.
In comparison the borrowers who are “not eligible” for the reduced fees under the streamline program, the cost of upfront mortgage insurance is 1.75 percent of the total loan and 1.25 percent of the loan per year.
Loan officers and other mortgage professionals say they have lists of clients who are waiting to refinance in June with the lower fees which could create a mini-refinance boom in June after the fees are reduced.
Remember that “No appraisal required”, except some lenders have overlays, if you are going from a 30-year to a (15-year mortgage) and your payment is not decreasing, or if you are removing one person off the title,” you’ll need an appraisal
As long as your mortgage payments decrease by at least 5 percent with the refinance, the lender does not have to order an appraisal of your home.
These guidelines are to help homeowners who are upside down on their mortgages.
Generally, lenders want a FICO score of 640 or higher for streamline refinances, Some lenders are willing to accept 620 and a few will go lower than that, but they usually charge higher rates on loans with lower scores.The FHA does not require a minimum credit score for streamline refinances, but the lender that is refinancing your mortgage will likely have its own requirements, as an additional “overlay”
With the streamline program, the FHA allows borrowers to refinance without having to show proof of employment and income. Although some states have laws that require lenders to verify borrowers’ income on all mortgages regardless of what the federal program allows. And in some cases you will likely be asked to present documentation that shows you can afford the mortgage payments.
In the last few years Lenders have been reluctant to underwrite mortgages without asking for full documentation and minimum credit scores, especially when many of the mortgages they are being asked to refinance have lower values and are underwater.
So these new guidlines should encourage lenders to embrace streamline refinances, since the government has changed the way it evaluates lenders’ FHA loan portfolios. The FHA has a scoring system based on the performance of each lender’s FHA loans. If a particular lender has too many delinquent loans compared to other lenders, the FHA may stop doing business with that lender.
Historically, the FHA Streamline Refinance has been an excellent program with lots of success stories and it remains the fastest, easiest refinance loan program in the country.
The FHA will start accepting these new streamline loans after June 11, 2012 but borrowers can begin the application process now in anticipation of the new program.
Everyone needs to be sure to find the ethical honest “Real Estate Industry Professionals” willing to assist the “American Homeowners”  who are “underwater” in regards to value in their home, be sure to  educate yourself, and beware of the mortgage fraudsters. Mortgage fraud is a material misstatement, misrepresentation, or omission relied on by an underwriter or lender to refinance, fund, purchase, or insure a loan.
If you have questions or need to know if you are dealing with a ethical or reputable lender, send an e-mail and I will attempt to assist you in the order the e-mails are received.

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Freddie Mac has invested billions of dollars betting that U.S. homeowners won’t be able to refinance their mortgages at today’s lower rates, according to an investigation by NPR and ProPublica, an independent, nonprofit newsroom.

January 30, 2012

Freddie Mac, a taxpayer-owned mortgage company, is supposed to make homeownership easier. One thing that makes owning a home more affordable is getting a cheaper mortgage.

These investments, while legal, raise concerns about a conflict of interest within Freddie Mac.

“We were actually shocked they did this,” says Scott Simon, who heads the mortgage-backed securities team at the giant bond trading and investment firm called PIMCO. “It seemed so out of line with their mission, out of line with what Congress wanted them to do.”

Freddie Mac, formally called the Federal Home Loan Mortgage Corp., was chartered by Congress in 1970. On its website, it says it has “a public mission to stabilize the nation’s residential mortgage markets and expand opportunities for homeownership.” The company is owned by U.S. taxpayers and overseen by a regulator, the Federal Housing Finance Agency (FHFA).

In December, Freddie’s chief executive, Charles Haldeman, assured Congress his company is “helping financially strapped families reduce their mortgage costs through refinancing their mortgages.”

But public documents show that in 2010 and 2011, Freddie Mac set out to make gains for its own investment portfolio by using complex mortgage securities that brought in more money for Freddie Mac when homeowners in higher interest-rate loans were unable to qualify for a refinancing.

Those trades “put them squarely against the homeowner,” PIMCO’s Simon says.

Freddie Mac’s trades came at a time when mortgage rates were falling to record lows. Millions of homeowners wish they could refinance, but their lenders tell them they can’t qualify for today’s low rates because of tight rules. Freddie Mac is one of the gatekeepers with the power to set those rules, and lately, it has been saying no more often to homeowners.

That raises concerns among some industry insiders who see a conflict: Freddie Mac’s own financial health improves when homeowners can’t refinance.

Simply put, “Freddie Mac prevented households from being able to take advantage of today’s mortgage rates — and then bet on it,” says Alan Boyce, a former bond trader who has been involved in efforts to push for more refinancing of home loans.

In the summer of 2010, long lines of hopeful homeowners waited for help from the Neighborhood Assistance Corporation of America’s “Save the Dream” tour. The tour made stops around the U.S., offering assistance from hundreds of mortgage counselors from various mortgage companies.

Freddie and FHFA repeatedly declined to comment on the specific transactions, but Freddie did say that its employees who make investment decisions are “walled off” from those who decide the rules for homeowners.

When Homeowners Lose, Freddie Mac Wins

Freddie Mac, based in Northern Virginia, says its job is to purchase “loans from lenders to replenish their supply of funds so that they [the lenders] can make more mortgage loans to other borrowers.” That’s one reason why Freddie has a gigantic portfolio containing loans that generate income from mortgage payments. Critics say this investment portfolio has been allowed to grow far larger than necessary to further Freddie’s policy mission.

Plus, in 2010 and 2011, Freddie didn’t just hold a simple pile of loans. Instead, for hundreds of thousands of home loans, it used Wall Street alchemy to chop these loans up into complicated securities — slices of which were sold in financial markets.

    This hypothetical example may help explain what happens:

    1) Freddie Mac takes, say, $1 billion worth of home loans and packages them. With the help of a Wall Street banker, it can then slice off parts of the bundle to create different investment securities, some riskier than others. The slices could be set up so that, say, $900 million worth are relatively safe investments, based upon homeowners paying the principal on their mortgages.

    2) But the one remaining slice, worth $100 million, is the riskiest part. Freddie retains that slice, known as an “inverse floater,” which receives all of the interest payments from the entire $1 billion worth of mortgages.

    3) That riskiest investment pays out a lucrative stream of interest payments. But Freddie’s slice also has all the so-called “pre-payment risk” associated with that $1 billion worth of loans. So if lots of people “pre-pay” their old loans and refinance into new, cheaper ones, then Freddie Mac starts to lose money. If people can’t refinance, then Freddie wins because it continues to receive that flow of older, higher interest payments.

If the homeowner is unable to refinance, the Freddie Mac portfolio managers win, Simon says. “And if the homeowner can refinance, they lose.”

Refinancing A Path To Recovery…

“I’m sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low rates,” Obama said during his State of the Union speech last week. “No more red tape. No more runaround from the banks.”

In his State of the Union address, President Obama pushed for legislation to allow “every responsible homeowner the chance to save about $3,000 a year on their mortgage” by refinancing without what he called “red tape” or a “runaround from the banks.”

Columbia University economist Chris Mayer supports such an approach. “A widespread refinancing program would have many benefits — not only helping the economy and putting tens of billions of dollars back in consumers’ pockets, the equivalent of a very long-term tax cut,” he says.

“It also is likely to reduce foreclosures and benefit the U.S. government by having fewer losses that they have to pay,” Mayer adds.

In the long term, he says, allowing more Americans to refinance would help taxpayers as well as mortgage giants Freddie Mac and Fannie Mae, because they would suffer fewer losses related to foreclosures. These inverse floater trades, however, give Freddie Mac a short-term incentive to resist such so-called “mass re-fi” programs.

“If there was a mass re-fi program, the bets they made would get absolutely wiped out,” PIMCO’s Simon says. “The way these bets do the best is if the homeowner is barred from refinancing.”

In a written statement, Freddie said it “is actively supporting efforts for borrowers to realize the benefits of refinancing their mortgages to lower rates.” It also says it refinanced loans for hundreds of thousands of borrowers just last year.

Fannie and Freddie have taken part in an existing federal program known as “HARP” to help Americans refinance, but many economists say far more homeowners would benefit if Fannie and Freddie were to implement the program more aggressively.
The Silversteins had trouble selling this house after they moved out, forcing them to carry two mortgages for more than two years. “It just drained us,” says Jay Silverstein.
Enlarge Chris Arnold/NPR

The Silversteins had trouble selling their house after they moved out, forcing them to carry two mortgages for more than two years. “It just drained us,” says Jay Silverstein.

Stuck In ‘Financial Jail’

Some homeowners believe the current re-fi game is stacked against them.
If Jay and Bonnie Silverstein were able to refinance their mortgage, they could save nearly $500 a month.

Jay and Bonnie Silverstein describe themselves as truly stuck in a bad mortgage. They live in an unfinished development of yellow stucco houses north of Philadelphia. The developer went bankrupt.

The Silversteins bought this home before the housing market crashed, and then couldn’t sell their old house. They now say that buying a new home before selling the old one was a mistake — a painful one. Stuck with two mortgages, they started to get behind on their payments on the old house.

“It wound up taking us years to sell that house, so we had two homes and two mortgages for two-and-a-half years,” Jay Silverstein says. “It burned up my 401(k) and drained us.”

Jay Silverstein has a modest pension, and they haven’t missed a mortgage payment on their current home. Still, they are struggling. They could make the monthly payment on their new home if they could just refinance — down from their current interest rate of near 7 percent to today’s rates below 4 percent. That could save them roughly $500 a month.

“You know, we’re living paycheck to paycheck,” he says. A lower rate “might go a long way toward helping us.”

But that’s the problem — getting approved for a refinancing. Here’s why: After the housing market crashed, the Silversteins’ old house had to be sold for less than the mortgage was worth. That’s known as a short sale.

Freddie Mac has been tightening lending restrictions, and one of its restrictions blocks people with a short sale in their past from refinancing for up to four years following that short sale. So the Silversteins are stranded by the rule.

“We’re in financial jail,” Jay says. “We’ve never been there before.”
One of Freddie Mac’s restrictions blocks people who have a short sale in their past from refinancing for two to four years following the short sale.

Tight For Homeowners, But Elsewhere, Money Still Flows

Economists say that during the housing bubble, lending standards got too loose. Now many believe the pendulum has swung too far, making rules too tight.

The short-sale restriction may be a good example. For a home purchase, such a rule may be prudent, but allowing people with existing loans to refinance actually lowers the risk that they may default by giving them more affordable mortgage payments.

In a recent analysis of remedies for the stalled housing market, the Federal Reserve criticized Fannie and Freddie for the fees they have charged for refinancing. Such fees are “another possible reason for low rates of refinancing,” the Fed wrote, adding that the charges are “difficult to justify.”

Meanwhile, even though Freddie is a ward of the federal government, its top executives are highly compensated. The Freddie Mac official then in charge of its investment portfolio, Peter Federico, made $2.5 million in 2010, and had target compensation of $2.6 million for last year — the time period during which most of these inverse floater investments were made. ProPublica and NPR made numerous attempts to reach Federico. A woman who answered his home phone said he declined to comment.

NPR’s Uri Berliner and Marilyn Geewax also contributed to this report.

How Homeowner Assistance Fell Short

Freddie Mac: Mortgage giants Freddie Mac and Fannie Mae were government-sponsored enterprises that nearly failed during the 2008 financial crisis that brought down the U.S. housing market. The government took over the companies that year; it has sunk more than $169 billion into keeping them afloat. Freddie Mac was chartered by Congress in 1970.

“Our statutory mission is to provide liquidity, stability and affordability to the U.S. housing market,” Freddie Mac says on its website. Fannie and Freddie own or guarantee trillions of dollars worth of mortgages and mortgage-backed securities. The Securities and Exchange Commission has charged that six former top executives of Frannie and Freddie misled investors about the firms’ exposure to high-risk mortgages.

FHFA: The Federal Housing Finance Agency has regulated Freddie Mac and Fannie Mae since the government took them over in 2008. The FHFA was created as part of the Housing and Economic Recovery Act of 2008, which was designed in part to allow borrowers to refinance with lower-cost, government-backed mortgages.

The Obama administration has been pressing the FHFA to allow more homeowners to refinance their government-backed loans at lower rates. But so far, programs to help millions of homeowners lower their costs have fallen short of expectations.

Refinancing: With mortgage rates at historic lows, millions of homeowners could save hundreds of dollars a month by refinancing their mortgages. Rates for 30-year fixed-rate mortgages have remained below 4 percent for several weeks in a row. But many homeowners can’t qualify for refinancing because their homes are “underwater” — the value has dropped far below the amount that they owe on their mortgages. In many cases, they can’t get a “re-fi” because they have been tripped up by a tangle of complicated eligibility requirements and paperwork.

— Avie Schneider from NPR

December 12th, 2011

The FHA has established minimum credit score requirements in order to be eligible for FHA financing.

The FHA guidelines specifically exclude from eligibility any borrower with a FICO score below 500.  Theoretically, any borrower with a credit score above 500 can be approved for an FHA loan but realistically, the lower the credit score, the more difficult it becomes to actually obtain FHA loan approval.

Borrowers with a FICO score between 500 to 579 are eligible for FHA-insured mortgage financing but are required to make a 10% downpayment and be able to verify sufficient income.  There are actually very few borrowers that wind up obtaining an FHA mortgage under these requirements.  A low credit score is indicative of a high level of mismatch between a borrower’s debt obligations and income, resulting in late or defaulted loan payments.  Under these circumstances, it is highly unlikely that a potential borrower would be able to accumulate a 10% downpayment.

Borrowers with credit scores above 580 are eligible for maximum FHA financing and are required to make only a 3.5% downpayment.  From a practical standpoint, however, it has become extremely difficult to obtain FHA loan approval unless the borrower’s credit score is above 620.  This is due to the fact that FHA lenders have established their own credit criteria for loan approval which exceeds the FHA guidelines.  Most of the largest banks that make mortgage loans under the FHA lending program require a minimum FICO score of 640.

The FHA and the banking industry have dramatically tightened underwriting criteria for loan approval due to the collapse of housing values and the large number of mortgage defaults. A borrower applying for an FHA mortgage today with a FICO score below 620 has a very low chance of being approved.

At the peak of the housing bubble in 2007, a huge 45% of FHA loans were approved for borrowers with credit scores below 620.  In 2008, the number declined to 33%, in 2009 to 14% and in 2010 to only 4%.  The number of borrowers approved for FHA insured mortgage loans with a credit score below 620 declined to 3% in 2011.

Borrowers with a credit score above 660 have the best chance of being approved for FHA financing as can be seen in the graph below.  In 2011, 70% of all FHA mortgage loans were given to borrowers with a credit score of 660 or higher.

 

from FHA website

WITH most lenders requiring home buyers to put down at least 20 percent — and sometimes, with more expensive properties, an even greater amount — the best gift some people might receive would be help with the down payment.

Under federal tax law, each individual is permitted to give away money or valuables worth up to $13,000 to a single recipient in a calendar year. A married couple could jointly bestow up to $26,000 a year per recipient.

“It really can be $52,000” if the recipient also has a partner, said Mike Maye, the owner of MJM Financial, a financial planning firm in Berkeley Heights, N.J.

And if the gift-givers wanted to spread even more good cheer into the next calendar year — perhaps distributing some future Click Here for Full Video/Article (Members Only)

The Senate on Thursday backed a measure to help bolster the housing market by making it easier for people to afford a home in wealthier neighborhoods.

The Senate voted 60-38 to attach the proposal to a spending bill that the chamber will consider later this year. It would restore the size of the loans the government buys or insures to a maximum of $729,500 from the previous cap of $625,500.

The cap, known as the “conforming loan limit,” determines the maximum size of loans the Federal Housing Administration and the government’s mortgage buyers, Fannie Mae and Freddie Mac, can buy or guarantee.

The higher loan limit expired at the end of Click Here for Full Video/Article (Members Only)

 Could This Be The Start Of A Nationwide Trend?

Are Big Banks Bullying Efforts Paying Off or Is Our Court System Scared Of The Tsunami of Mortgage Fraud Cases Smothering Their Dockets?

Theresa Edwards and June Clarkson had headed up investigations on behalf of the Florida attorney general’s office for more than a year into the fraudulent foreclosure practices that had become rampant in the Sunshine State. They issued subpoenas and conducted scores of interviews, building a litany of cases that documented the most egregious abuses.

That is, until the Friday afternoon in May when they were called into a supervisor’s office and forced to resign abruptly and without explanation.

“It just came out of nowhere,” said Edwards, who had worked in the attorney general’s economic crimes section for more than three years. “We were completely stunned.”

Less than a month before they were forced out, a supervisor cited their work as “instrumental in triggering a nationwide review of such practices.” Now, Edwards is convinced their sudden dismissals will have “a chilling effect” on those probes into the shoddy foreclosure practices that caused national outrage when they made headlines last fall.

Although similar abuses have occurred throughout the country, they have been particularly rampant in Florida, which was ground zero for the housing bust and is home to a collection of large law firms that were hired by the financial industry to relentlessly churn out foreclosures in recent years. That made the investigations headed by Edwards and Clarkson among the earliest and most closely watched by officials across the country.

A spokeswoman for Florida Attorney General Pam Bondi declined to comment on what she cited as internal personnel matters but said in an e-mail that the foreclosure investigations remain a top priority.

Before the uproar last fall, Edwards and Clarkson were already investigating the problems plaguing foreclosure filings in the state. Working under then-attorney general Bill McCollum, they created a 98-page presentation entitled “Unfair, Deceptive and Unconscionable Acts in Foreclosure Cases,” which detailed such far-ranging problems as fake and forged affidavits and falsified mortgage ownership records.

Their inquiry led them to focus on “foreclosure mill” law firms that were filing foreclosures for their clients at lightning speed, as well as to the practices of other companies in the mortgage industry. It also led to calls from other attorneys general offices across the country that were beginning to scrutinize similar problems.

“We were farther along in our investigation because we had dug a little deeper than anybody else,” Edwards said. “We kept opening up more and more investigations, more and more cases.”

Their work won them accolades. In the evaluation provided by Edwards, a supervisor wrote that the pair had “achieved what is believed to be the first settlement in the United States relating to law firm foreclosure mills” — a multimillion-dollar settlement a month earlier with a Fort Lauderdale firm.

Despite that praise, Edwards and Clarkson said in separate interviews that they sensed a change when Bondi took office in January. Almost immediately, they said, supervisors began to question their findings and demand details about how they were gathering information.

Both women say they were summoned into a meeting on the afternoon of May 20 and told they could either resign or be fired. Either way, they would no longer be employed come 5 p.m. They had to come back over the weekend to pick up their things, they said.

“No two weeks’ notice, no severance, no nothing,” Clarkson said. “I have no idea why it happened.”

Added Edwards, “We didn’t even have a chance to go over our cases with anybody. We were just locked out.”

A spokeswoman for Bondi, Jennifer Krell Davis, said the economic crimes division “continues to actively pursue the investigations into foreclosure law firms.” She said the division’s director, Richard Lawson, is leading the inquiry into one of the state’s largest foreclosure firms and is supervising other cases.

“The division has made these investigations a top priority and will continue to actively pursue all of our investigations into foreclosure law firms,” Davis said in an e-mail, adding that Lawson had assigned 14 attorneys and investigators to work on the cases that belonged to Edwards and Clarkson.

As for their hasty departure, she wrote, “We do not comment on personnel matters. However, the Florida Attorney General’s Office is always striving to make sure that we have the best staff working to serve and protect the people of Florida.”

Edwards and Clarkson, whose dismissals were first detailed this week by The Palm Beach Post, have since opened a private law firm together in South Florida focused largely on foreclosure defense. They expressed doubts about how aggressively the cases they left behind will be pursued, saying the other attorneys in their division are dedicated and hardworking but that each already had a full caseload.

For her part, Clarkson said she worries about the work left undone, the potential misdeeds left undiscovered, even as state and federal officials negotiate a settlement with banks to end some of the worst practices.

“There is so much paperwork that came in due to our subpoenas that I didn’t even get a chance to look at,” she said, adding, “I looked at enough to know that there’s a lot more problems out there.”

By Brady Dennis, Published: July 14
from Washington Post Business

Forwarded by Gold Member Roger Taylor

The Federal Reserve said it is leaving its target on short-term rates in the 0-0.25% range, stating that the economy is recovering more slowly than expected and the labor market is weaker than anticipated.

As the nation’s housing market continues to teeter, the Treasury Department on Thursday penalized three of the nation’s largest banks for subpar performance in administrating a government-sponsored program to modify mortgage loans for distressed homeowners.

As part of a new assessment of mortgage servicers, Treasury officials said they would withhold incentive payments for the three banks — Bank of America, JPMorgan Chase and Wells Fargo — until the problems are resolved. At that point, those payments would be made, a Treasury spokeswoman said.

In May, the three banks received $24 million in incentives as part of the modification program.

The Treasury Department has previously withheld payments from mortgage servicers, but Thursday’s action focused on some of the biggest players in the program. Called the Home

Affordable Modification Program, or HAMP, it is voluntary for mortgage servicers. Nearly all of the nation’s largest banks have signed contracts to participate.

The Obama administration has long been criticized as being too easy on the mortgage servicers, and Thursday’s announcement did little to quiet that criticism.

Neil M. Barofsky, who resigned in March as special inspector general for the bank bailout, described the assessments and penalties as a “lost opportunity” to hold lenders more accountable.

“It further reaffirms Treasury’s long-running toothless response to the servicers’ disregard of their contract with Treasury, and by extension, the American taxpayer,” Mr. Barofsky said in an e-mail.

Timothy G. Massad, assistant Treasury secretary, defended the approach. He said the assessments of banks and other mortgage servicers “will serve to keep the pressure on servicers to more effectively assist struggling families.”

“We need servicers to step up their performance to meet the needs of those still struggling,” he said in a statement.

The mortgage servicers were evaluated on a scale of one to three stars during the first quarter on whether they had identified and searched for eligible homeowners; assessed homeowners’ eligibility correctly; and maintained effective program management, governance and reporting.

Bank of America received the lowest grade, one star, on four of seven areas that were evaluated; Wells received one star in three areas; and Chase, in one.

A fourth mortgage servicer, Ocwen Loan Service, was also assessed as needing substantial improvement, but Treasury said it would not withhold payments to Ocwen because it was negatively affected by a large acquisition of mortgages to service.

Six other mortgage servicers were graded as needing moderate improvement. There were no servicers deemed as needing only minor improvement.

Wells Fargo issued a statement saying it was “formally disputing” the Treasury’s findings.
“It paints an unfairly negative picture of our modification efforts and contradicts previous written assessments shared with us by the Treasury,” said spokeswoman Vickee J. Adams, who said the criticisms were dated and did not reflect recent improvements.

Chase said it too had made significant improvements. “The bank respectfully disagrees with the assessment,” the company said in a statement.

Dan B. Frahm, a spokesman for Bank of America, said that the bank was “committed to continually improving our processes to assist distressed homeowners” through the federal modification program and its own internal program. But he added, “We acknowledge improvements must be made in key areas, particularly those affecting the customer experience.”

The modification program was created using $50 billion that was set aside from the bank bailout to help distressed homeowners. The idea was that the Treasury Department would provide incentives to mortgage servicers and investors to modify mortgages for struggling homeowners, rather than foreclose on them.

The administration predicted that three million to four million Americans would benefit, but so far, only 699,053 permanent modifications have been started.

To date, Treasury has spent about $1.34 billion on HAMP. One problem was that the mortgage servicers, at least initially, were not prepared to handle the onslaught of modifications, and homeowners complained that paperwork had been routinely lost and trial modifications had dragged on for months.

by Andrew Martin with New York Timeshttp://www.nytimes.com/2011/06/10/business/10hamp.html?_r=1

Not long ago, first-time buyers accounted for 40% of home sales.

Now they’re down to 29% and falling, experts say, as first-time buyers confront a steady accumulation of rising fees, costs, and rates.

This month, fees on most new mortgages will rise by up to 0.50%. In April, fees on small-down-payment mortgages, a first-time buyer favorite, will spike.

Without a house to sell , first-time home buyers have had a field day in the depressed housing market. Until recently, anyway.

A series of new rules, regulations and policies have changed the Click Here for Full Video/Article (Members Only)

A broad agreement could be struck within two months to overhaul how millions of foreclosures are handled by the nation’s biggest banks and to expand the use of home loan modifications, according to Tom Miller, the attorney general of Iowa.

WASHINGTON — All 50 state attorneys general, along with federal regulators, have been stepping up pressure on the mortgage servicers over their foreclosure lapses in recent days and presented them with an outline of a settlement late last week. But when Mr. Miller made his comments at a press conference here on Monday, it was the first time officials have said when an agreement might come.
“I’m hoping we can wrap it up in a couple of months,” he said. “That’s a hope, but we’re going to move as fast as we can.”

There have been reports that a broad settlement with the banks was imminent, but Mr. Miller played down that prospect, citing thorny issues like the question of just which homeowners should benefit from the proceeds of any settlement.

The attorneys general and federal government agencies are pressing for a financial settlement that could total over Click Here for Full Video/Article (Members Only)

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