bailout
It Pays To Be A Freddie, Fannie Exec
Monday, April 4th, 2011 | Bank owned, Foreclosures | No Comments
Did you see the latest report on the salaries paid to the heads of Freddie Mac and Fannie Mae in 2009 and 2010? You’re not going to believe this one.
“The heads of bailed-out mortgage finance giants Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) were paid fat salaries without proper written procedures or analysis, according to a report published by the Inspector General of the Federal Housing Finance Agency (FHFA-OIG). Also, the housing regulator Federal Housing Finance Agency (FHFA) has not considered the factors that might have possibly resulted in reduced executive compensation costs, the review report said.
The heads of Fannie Mae and Freddie Mac were paid a total of $17.1 million in 2009 and 2010 — the two full years of government ownership. The top six executives at the housing giants were paid $35.4 million over the two years, according to the report that was posted on the agency’s website.
Read more here.
House Votes to Terminate FHA’s Short Refi Program
Friday, March 11th, 2011 | Foreclosures, Real Estate Investing | No Comments
Check out this quick update I found today:
The U.S. House of Representatives has passed legislation to end the Federal Housing Administration’s (FHA) Short Refi Program aimed at helping homeowners who owe more on the mortgage than their home is worth obtain a new FHA-insured loan with a reduced principal.
In a 256 to 171 vote Thursday evening, the House approved the FHA Refinance Program Termination Act (H.R. 830). The vote was mostly split along party lines, with only one Republican departing from the majority and casting a nay, but 18 Democrats throwing their support behind ending the program.
It’s the first of four bills targeting federal foreclosure mitigation programs. Three others are also up for floor votes before the full House in the coming days – the Emergency Mortgage Relief Program for unemployed homeowners, the Home Affordable Modification Program (HAMP), and HUD’s Neighborhood Stabilization Program.
The bills are expected to meet strong resistance in the Democratic-controlled Senate, and will likely invoke a presidential veto if they land on Obama’s desk, according to a statement from the White House.
Bill Would Force Lenders to Decide on Short Sale in 45 Days
Monday, September 20th, 2010 | Bank owned, Pre-foreclosure, Real Estate Investing, Real estate short sales, Short Sales | 1 Comment
There’s some encouraging news on the horizon for homeowners hoping to sell their homes via a short sale – in the form of a new bill being introduced into the U.S. House. The bipartisan Prompt Decision for Qualification of Short Sale Act of 2010 would impose a deadline on lenders to respond to short sale requests with an answer within 45 days. The bill is sponsored by Reps. Robert Andrews (D – New Jersey) and Tom Rooney (R – Florida). This bill is in reaction to the flack lenders are receiving for dragging out short sale timelines. In many cases, home sales have fallen through because lenders were too slow to respond to short sale offers – neither getting a yes or a no. This bill would help short sales close much more quickly. With the number of potential short sale properties rising across the country, Congress is being urged to pass the bill quickly. In many cases now, it can take 90 days or more to receive a decision on a short sale request from a lender, and in some cases, the answer never comes! For millions hoping to avoid foreclosure, a short sale can help relieve them of the overwhelming stress of their mortgage.
Fannie Mae Selling Foreclosed Homes with Subprime Terms
Wednesday, September 15th, 2010 | Bank owned, Foreclosures, Real Estate Investing | No Comments
Through their new HomePath program, troubled GSE giant Fannie Mae is offering their foreclosed homes for sale with as little as 3% down. What’s more, that 3% can be a gift from a family member of third party, or a loan from a non-profit, state or local government. Doesn’t this remind you of the “deals” that got us in this housing mess in the first place? There’s a difference. To qualify for those terms, a purchaser must choose one of Fannie Mae’s foreclosed homes, and then buy it “as is.” If the ideal home is found and renovations are needed, a buyer may qualify for the HomePath Renovation Mortgage, which will fund both the home purchase and minor renovations. This is the only time an appraisal would be required. Here’s what a potential buyer can expect, otherwise:
- Low down-payment and flexible mortgage terms (fixed-rate, adjustable-rate, or interest-only).
- You may qualify even if your credit is less than perfect, as low as 660, when most lenders want a minimum of 700.
- You can qualify as an investor or owner-occupant.
- Down payment must be at least 3% for an owner-occupant, but it must be funded by your own savings or by a gift, a grant or a loan from an employer, a nonprofit organization, or a state or local government. Investors must come up with 10% down.
- No appraisal is required.
- No mortgage insurance is required, but the terms of the loan may not be as favorable.
Hard Hit Neighborhoods Get $1B From HUD
Monday, September 13th, 2010 | Bank owned, Foreclosures, Real Estate Investing | No Comments
With foreclosures on the rise, communities are often left with properties that turn into eyesores – vacant, not maintained, falling apart. Last week, HUD awarded an additional $1 billion to state and county governments to help communities clean up the effects vacant homes. This is the third round of the Neighborhood Stabilization Program funding, designed to allow communities to earmark the money for acquiring, redeveloping or demolishing foreclosed properties. Every state, including Washington DC and Puerto Rico, has received funding. This latest round follows $6 billion already dedicated to this program since 2008. “State and local governments can use their neighborhood stabilization grants to acquire land and property; to demolish or rehabilitate abandoned homes; and to offer downpayment and closing cost assistance to low- to moderate-income homebuyers. In addition, the grantees can create “land banks” to assemble, temporarily manage, and dispose of vacant properties.”
Plan to Help Underwater Homeowners Launched
Friday, September 10th, 2010 | Bank owned, Foreclosures, Real Estate Investing | No Comments
Will this program finally make a difference? The government is trying to jump-start its so-far weak attempts to tackle the foreclosure crisis by trying to help homeowners who owe more on their homes than they are worth. The Federal Housing Administration will allow lenders to give these borrowers refinanced loans if the lender agrees to forgive at least 10% of the original mortgage amount. The plan, which was announced in March, is being made available starting today. The FHA estimates that between 500,000 and 1.5 million homeowners are projected to be helped. However, the government’s previous efforts to stem foreclosures have fallen far short of expectations. Analysts at Barclays Capital estimated last month that the refinancing program would only benefit 200,000-300,000 homeowners. As of the end of June, there were 11 million U.S. homes, or 23% of those with a mortgage with underwater mortgages, according to real estate data provider CoreLogic.
Banks Give Local Groups First Shot at Foreclosures
Thursday, September 9th, 2010 | Bank owned, Foreclosures, Real Estate Investing | No Comments
Major banks, including Bank of America and Wells Fargo, are agreeing to give local governments and nonprofit groups the ability to buy foreclosed homes before they are sold to private investors. The Obama administration says local officials could benefit from acquiring these properties and using the land for redevelopment projects. Congress has provided $7 billion in money to buy the homes. These groups have been outbid by speculators who are snapping up foreclosures. The administration says the largest ortgage lenders in the country have agreed to let the groups purchase the properties ahead of private speculators.
What’s the Real Number of Homes in Shadow Inventory?
Monday, August 23rd, 2010 | Bank owned, Foreclosures, Real Estate Investing | No Comments
The housing market’s shadow inventory continues to be the real unknown, and the real threat to recovery. It’s a scary thing, and helps paint the true picture of what is going on with real estate. Listen to this. The government doesn’t report on how many homes are held by the banks on their books or in private label securities. Since they are in control of Freddie Mac and Fannie Mae, we can at least find out what’s the true amount there. Together, Freddie and Fannie and FHA hold 236,338 homes. But big banks report their REOs in quarterly earnings reports, and only as value of properties, not actual number of properties. That said, Thomas Lawler, economist and housing consultant, estimates that banks own $14.5 billion worth of REOs, or about 97,000 properties. Add that to private label possessions and the total number climbs to almost 600,000. That’s a far cry from the 546,000 homes the NAR reported sold in June. There’s a four month supply of foreclosed homes alone.
Nearly 50% Bail on Mortgage Aid Program
Monday, August 23rd, 2010 | Bank owned, Foreclosures, Real Estate Investing | No Comments
We’ve seen it before and here is proof again that the government-sponsored mortgage aid programs are not working.
Late last week, the Treasury announced that about 48% of the 1.3 million homeowners who enrolled in the flagship mortgage-relief program since March 2009 are no longer in the program. That represents about 630,000 homeowners who have tried to get their monthly mortgage payments lowered. The Treasury also suggested that the number of foreclosures could rise in the second half of the year. Not exactly a good outlook for the housing market. Just over 32% of homeowners enrolled in the program have received permanent loan modifications and have been able to stick to their payment schedule. One thing the homeowners seem to agree on is that the program is a red-tape nightmare. Complaints of lost paperwork or documents not being received are commonplace. Some of the larger mortgage companies in the program have been trying to offer alternative programs to those who dropped out of the government-backed program.
New Rule May Ban GSEs from Investing in Mortgages with Transfer Fees
Wednesday, August 18th, 2010 | Bank owned, Foreclosures, Real Estate Investing, Real estate short sales | No Comments
More restrictions coming for Freddie and Fannie, if the FHFA has anything to say about it!
If a new rule goes into effect and FHFA (Federal Housing Finance Agency) gets their way, GSEs will be banned from purchasing mortgages with private transfer fee covenants. These fees are sometimes worked into the home purchase contracts and require a percentage of the sale price be paid to the original owner of the property, every time the property is sold – for a period of 99 years. Edward DeMarco, FHFA’s acting director, said “The private transfer fee covenants appear to run counter to the important mission of the housing GSEs to increase liquidity, affordability, and stability in the nation’s housing finance system. Encumbering housing transactions with fees that may not be properly disclosed may impede the marketability and the valuation of properties and adversely affect the liquidity of securities backed by mortgages on those properties.” FHFA has issued a notice of proposed guidance to the Federal Register that would ban Fannie and Freddie from purchasing or guaranteeing mortgages and securities that have the controversial home resale fees attached to them. The guidance would also extend to home loans and securities purchased by the Federal Home Loan Banks or acquired as collateral for advances.
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