Mass Refinance Plan For Non-Conventional Mortgages Proposal in Congress

February 2, 2012 By admin Leave a Comment

Mass Refinance Plan For Non-Conventional Mortgages Proposal in Congress

There are several programs being considered as the Obama administration rolls out what was mentioned in the State of the Union address as another recovery program.

The criteria to meet the new loan would be refinanced through the Federal Housing Administration even if the FHA doesn’t already insure their existing mortgage. Other criteria about the new streamlined refinance program include:

  • Eligible borrowers that have mortgages not already owned by Fannie Mae or Freddie Mac (as those are already covered by the recent expanded HARP – Home Affordable Refinance Program)
  • No more than one missed payment during the past year
  • No tax returns or appraisals would be required, though employment must be verified.  Unemployed borrowers will only be considered if they meet the other underwriting requirement.
  • The minimum FICO score will be 580 – a requirement that administration says 9 out of 10 borrowers meet.
  • Maximum loan amounts would be based on existing FHA loan limits, which range from $271,050 to $729,750.
  • Loan-to-Value ratios would be limited to 140 percent.

The administration expects borrowers to save an average of $3000 a year from the refinance initiative, while lenders will pick up the estimated $5 billion to $10 billion for program costs.

The savings to homeowners will be through choosing shorter loan terms.  If the borrower chooses a shorter 20-year term, then Fannie, Freddie, or FHA will pay the closing costs.

The president also outlined a proposal for legislation that would further streamline the refinance process for borrowers whose loans are owned or guaranteed by Fannie or Freddie.  This plan will eliminate the appraisal costs on HARP loans through mark-to-market accounting and other alternative when automated-valuation models won’t work.

Other initiatives outlined cover-converting real estate owned properties into rentals and a homeowner’s bill of rights.  This bill of rights will provide simplified mortgage disclosure form, prohibit hidden fees and provide guidelines that prevent conflicts of interest.  The Consumer Mortgage Coalition is scrutinizing this document.  They released a statement indicating that they are “very pleased that the president is so committed to simplifying mortgage disclosures.” The scrutiny comes with the Consumer Financial Protection Bureau (CFPB), which provided drafts of a new disclosure that does not work with existing disclosure rules.

In a statement, Mortgage Bankers Association President and CEO, David H. Stevens, said that they support at nation single set of standards.  He noted that such standards could help provide confidence and certainty in the real estate market for borrowers, lenders, and services alike.

 

Filed Under Mortgage Industry

HAMP Deadline Extended to Help More Homeowners

January 30, 2012 By admin Leave a Comment

HAMP Deadline Extended to Help More Homeowners

As promised in the State of the Union address, the Obama administration announced on Friday it would significantly broaden the pool of persons eligible for mortgage modifications to owners of rental properties and homeowners with medical, credit card bills, and second mortgages.

With HAMP (Home Affordable Modification Program) investors were included in the ability to refinance because the foreclosed rental properties were having a detrimental effect on low and moderate-income renters.  “The whole purpose of HAMP is to try and prevent foreclosures,” said Treasury Assistant Secretary Tim Massad in a conference call with reporters Friday afternoon. He also said that this would affect roughly 700,000 rental properties nationally.

Federal officials said that HAMP will begin to evaluate borrowers who were previously ineligible for mortgage modifications because their debt-to-income ratio on their first mortgages was below 31 percent.  HAMP was previously set to expire in December, now is extended to December 31, 2013. There will be no additional cost to taxpayers for the expanded program.  It will be funded by the $29 billion already set aside for mortgage modification efforts.

Officials have declined Friday to estimate how many additional homeowners would be helped as a result of the program changes, because HAMP has been previously criticized of falling short of helping 3 to 4 million homeowners as promised.

Writing down mortgage balances have been long sought by consumers, who question why they continue to pay mortgages on properties when there is little chance of regaining any equity in their homes due to the housing crash. Homeowners “shouldn’t have to sit and wait for the housing market to hit bottom” before finding some relief, said Shaun Donovan, current secretary of the U.S. Department of Housing and Urban Development.

 

Filed Under Mortgage Industry Tagged With Federal Reserve, HAMP, Homeowner Relief, Mortgage Industry, Refinance

Recovery Slow and Fed Likely to Hold Interest Rates Low in Response

January 26, 2012 By admin Leave a Comment

Recovery Slow and Fed Likely to Hold Interest Rates Low in Response Through 2014

The Federal Reserve said Wednesday that unemployment is projected to remain high over the next three years.  This is a year longer than previously expected. Policymakers project that the unemployment rate will remain at 8.5 percent for much of this year and only fall to between 6.7 and 7.6 percent by the end of 2014.

“We’re certainly prepared to look for different ways to provide support to the economy if, in fact, we have this unsatisfactory situation,” said Fed Chairman Ben S. Bernanke after a policymaking session.  This means the central bank will probably keep interest rates near zero through 2014 if the unemployment rate trends as indicated.

Bernanke made it clear that these are projections only, and that predicting the future path of the economy is a difficult thing to do.  In its policy statement the Fed said that the economy has been growing only moderately.  After being criticized by economists for repeatedly underestimating the depth of economic challenges facing the county, Fed officials do not want to be accused again not addressing the situation.

To make the most of its low-interest-rate-policies, Fed officials have urged Congress and the Obama administration to relax standard for refinancing mortgages so more Americans can do so.  This would be a huge boost to the mortgage industry and having consumers who have re-financed possibly having the opportunity to do so again.

Obama announced such a policy – a large expansion of mortgage financing in his State of the Union address, but the proposal requires Congressional approval.  In this election year that could prove very interesting if and when those policies are passed.

Bernanke wants to send a message, as a kind of confidence-building gesture, to business and consumers that they can expect cheap credit for an extended period of time. He also noted that the Fed is ready to step up efforts to pump money into the economy also by buying long-term securities if the Fed thinks it’s appropriate.

Filed Under Mortgage Industry Tagged With Ben Bernanke, Federal Reserve, Interest Rates, Mortgage Direct Mail, Unemployment Rate

Changes at Post Office Affect Direct Mail

January 26, 2012 By admin Leave a Comment

Changes at the Post Office Affect Direct Mail

Effective this week, businesses mailing First–Class Mail automation, presort letters using “2nd Ounce Free” pricing can mail letters weighing up to 2 ounces at the 1-ounce postage rate. First-class Mail automation, pre-sort letters are primarily generated by commercial mailers of bills and statements or transaction mail.

This program does NOT apply to single-piece letters mailed by consumers.

Facts from the USPS:

  • Allows mailers to effectively reach and target customers
  • With 2nd Ounce Free, mailers can look at the envelope and paper quality without worrying about extra postage costs.
  • The post office calls this ability to integrate mail TransPromo.  It is the combination of Transacting Business combined with Promoting Business. This means a statement or invoice can also include promotional material for the next purchase or transaction.

According to the Post Office, bills and statements delivered via First-Class Mail are opened more than 95 percent of the time, and on average, the receiver spends 2 to 3 minutes with each piece. “This makes transaction mail a highly effective medium for target marketing,” says Gary Reblin, vice president Domestic Products.

This comes on the heels of the January 22, change in regular First-Class Postage. Postal rates increased by 2.1 percent, on average, across each class of mail.  Because the Postal Accountability and Enhancement Act of 2006, mailing services prices can increase no more than the rate of inflation based on the Consumer Price Index (CPI).

Single-piece, one-ounce First-Class letters increased to $.45 with additional ounces remaining at $.20. The prices for postcards went up as well to $.32 and single-piece large envelopes (flats) increased to $.90 maintaining a 2-to-1 ratio with single-piece letters.

This is the first change in the First-Class rate the Post Office has made since the May 11, 2009 increase from 42 cents to 44.

 

Filed Under Postal Changes Tagged With Direct Mail Marketing, Postal Rates, United States Post Office, USPS

New HARP Guidelines Released

November 16, 2011 By admin Leave a Comment

The newly expanded guidelines for the Home Affordable Refinance Program have been released by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp. The program becomes effective on loans with application dates on or after Dec. 1.

In addition to the elimination of maximum LTVs on both 15- and 30-year mortgages, there are no limits on the maximum CLTV or HCLTV. Fixed-rate mortgages with amortizations up to 40 years will be limited to 105 percent LTVs as will ARMs with initial fixed periods greater than or equal to five years and terms up to 40 years.

Fannie Mae HARP extension is detailed in the Fannie Mae Selling Guide Announcement SEL-2011-12.

Freddie Mac HARP guidelines are outlined in Freddie Mac Bulletin 2011-22.

The Federal Housing Finance Authority continues to require no 30-day lates in the past six months with one 30-day late allowed in the past year.

Lenders that opt to reach out to borrowers are required to include specific language about HARP enhancements and how to determine whether the borrowers’ loans are owned by Fannie or Freddie Mac.

Premier Advantage Marketing is prepared to help you with your mortgage direct mail marketing to fill your lending pipeline. Your lending success is our first priority.

888-799-3959

Filed Under Direct Mail, Direct Mail Marketing Tagged With Direct Mail Marketing, HARP Guidelines, Mortgage Direct Mail

Direct Mail Marketing 101 BLOG

October 9, 2011 By admin Leave a Comment

Premier Advantage Marketing has created its own BLOG with direct mail marketing hints, tips and trends at: http://www.directmailmarketing101.com/.

Filed Under Direct Mail, Direct Mail Marketing Tagged With direct mail effectiveness, Direct Mail Marketing, Experienced direct mail provider