You may have heard about the revision on the radio or in the news.  For the past two years many of us receive emails, phone calls or mail regarding this program which can also be known as the Making Home Affordable Refinance or the Relief Refinance.  The program was originally implemented in April 2009 and since then has only helped a mere 800,000+ of the more than 11,000,000 underwater homeowners.

If you have a conventional, conforming mortgage loan (serviced by Fannie Mae or Feddie Mac), you are current on your mortgage and your loan originated before June 1, 2009 then you may be eligible.

The revisions to the new program remove any loan-to-value restrictions that were previously part of the guidelines which will allow the new revamped program to help approximately double that of the last HARP go-around.  However, with that said, it’s still just a drop in the bucket of the huge population of underwater homeowners in the United States.

If you want to find out if you are eligible or want to learn a bit more please feel free to shoot me an email or give me a call (503.798.9183).

At this time Fannie and Freddie are working with banks to implement the guidelines for the program.  Soon we will have all the details program implementation.

For those of us in the industry this is yet another change we will welcome with open arms.

The CFPA is asking for consumer/industry votes on the two options they have laid out for the new mortgage disclosure.  Both options provide the same information with a variance in layout.  Personally I like less ink on the page and would like to see Option B make a run for office.  The CFPB has made themselves easily accessible through the interwebs.  Much like whitehouse.gov, consumerfinance.gov is linked up on Twitter and Facebook as well as a few other social sites.  You can view and vote on the new mortgage financing disclosure here: http://www.consumerfinance.gov/knowbeforeyouowe/.

An increase in a borrower’s debt capacity may be a result of:

• A new debt
• Increase of minimum payment for revolving debt (credit cards, store cards, lines of credit)
• Student loans coming out of deferment

As you can imagine, this will inevitably cause delay in funding a loan when a borrower’s debt capacity has been impacted.  If a borrower incurs new debt and does not disclose the outcome of loan approval may be changed.  Fannie Mae’s primary goal is to insure a borrower’s ability to sustain homeownership.  It’s important to look at a borrowers total debt capacity at time of final loan application.

Responsibility: The Lender – Lenders are responsible for accurately qualifying borrowers and assessing their ability to repay their loan.  Sound underwriting are implemented to exercise due diligence throughout the entire origination process.  The responsibility of the loan file begins at time of application and carries through to closing.

Responsibility: The Borrower – Borrower’s have the responsibility of providing the lender with accurate and complete information for the loan application.  It’s always been important, but now is even more important for a borrower to notify the lender of any changes to their employment, income, debt obligations or other financial circumstances during the application process.

The bottom line: As you embark on your next financing transaction (purchase or refinance) make sure you fully disclose all debt at time of initial application.  Any new debts that may not be reporting at time of application will surely reveal themselves and may cause you an issue in obtaining loan approval.  Spending/borrowing on revolving accounts must be managed very carefully and/or completely avoided. Please remember that even a small change in one of these payments could potentially cause your debt capacity to increase and will result in a re-underwrite of your loan which will result in a delay of closing.

I am always here as a resource, in process or before you decide to make a move.  Please give me a call (503.585.1105) or shoot me an email to inquire about your specific refinance or purchase questions.

The digital/internet press is heating up as we close in on the November 30th deadline to close a purchase and qualify for the FTHB tax credit.  In the office we’re slammed with purchase transactions that are heading for a mid-November closing and we couldn’t be more blessed.  However, there are still a good portion of our qualified borrowers who have yet to find a home.  We’ve heard both positive and negative news recently regarding an potential extension of the tax credit.

Yesterday I read the article, “Washington Report: $8,000 Home Buyer Tax Credit” which stated that President Obama, House speaker Nancy Pelosi and Senate majority leader Harry Reid met this past week to discuss a possible extension for military personnel serving overseas and that Reid is in support of a full extension and possible expansion of the tax credit.

Today I read an article, “Push on to expand $8,000 tax credit” from cnnmoney.com stating again that congress is considering an extension of the tax credit.

The tax credit is costly.  There are definite pros and cons for extending the credit.  Bottom line, we’re still seeing a rise in unemployment which results in increased mortgage defaults.  If the tax credit can help qualified buyers move towards homeownership we will all benefit from having the inventory of foreclosed homes shrink in 2010.

Here are some great reason to buy in 2009

Historically low interest rates: Despite what you may have heard in recent weeks, mortgage rates are still at all time lows.  Mortgage rates below 6% only come around every 10 years or so.  To see them in the sub-5% range is even more of a rarity.  First time homebuyers can fit a larger purchase price into their personal budget when interest rates are low.

Historically low home prices: We are definitely beginning to see a great amount of movement of home purchases in the Willamette Valley this year, but we are still have plenty of homeowners with the need to sell.  The inventory of homes on the market is greater than ever which makes it a perfect buyer’s market.

Loan programs designed for first time homebuyers: There are several programs that have been designed and adjusted for first time homebuyers (although they are not necessarily exclusive for first time homebuyers).  The FHA home loan program only requires a down payment of 3.5%.  FHA also offers a rehabilitation home loan which allows borrowers to finance up to $35,000 of improvements.

Free money: The $8,000 first time homebuyer tax credit is definitely a once in a life time opportunity.  The tax credit is only available for those who purchase before November 30th, 2009.  There are a few important steps to buying your first home, so it’s best to get prequalified now to know if you can take advantage of this amazing opportunity.

If you want to discuss how you can take advantage of this market then contact me today.  If you don’t qualify as a first time hombuyer i’m sure you have friends or family who do and should get the education they need to learn about this epic time.

As I mentioned a few weeks ago, President Obama’s American Recovery and Reinvestment Act included a new program for struggling home owners.  The existing modification program for those who are delinquent is still available, but now there is a program geared towards those who have continued to be responsible with their mortgages, but simply don’t have the equity in their home to take advantage of today’s low interest rates.

The website financialstability.gov has been around since the signing of the new bill, but the Obama Administration has yet again expanded what I’m calling the “Government 2.0″ efforts with the new website makinghomeaffordable.gov.  This website allows home owners to check eligibility for the new program and offers a handful of other helpful tools.

Although the program will only help a select group of Americans with Fannie Mae or Freddie Mac loans the website will likely be a good resource for those who are struggling.

As with any real estate or mortgage related questions, I am here for you.  If you have any questions regarding any of these new programs or about your current financing scenario please don’t hesitate to contact me.

On Tuesday details of President Obama’s Housing Affordability Plan became available to the public.  The program is still in the very early stages of establishment which means that although there is some information available there isn’t enough to make sense of it all.  Currently there is a website set up that provides some good information to determine if one is eligible for the program.  However, it’s important to know that the government’s website will just tell you to prepare some documents that will help your current lender decide if your eligible for any help from this program.

The program outlines two essential goals to this program:

• Making Home Affordable Refinance
• Modification Options

For nearly a year we’ve been hearing the federal government make claims about encouraging lenders to modify existing loans they service in order to help homeowners avoid foreclosure.  At this point the government has stepped it up a bit and is now encouraging banks andservicers to not only modify loans, but also refinance loans for those who have been responsible.  The modification has been geared towards those who are already late on their mortgage.  The Making Home Affordable Refinance is geared towards those homeowners who are currently “underwater”, as the government is now calling it.  This means that the lenders will help borrowers refinance if they owe more than the value of their home.  However, if the loan is greater than 5% of the value of the home, the borrower may be unable to take advantage of this program.

This quick fact sheet gives a basic outline to the new program.

To check eligibility or to see more details about the program visit financialstability.gov. The website encourages you to contact your lender after gathering pertinent information.  Since the details are still somewhat vague and the program is still new, you’ll have to be very patient with your lender as they will likely have little detail about how the process will work at this time.

In the article Senate Advances Tax Breaks for Homebuyers, Senator Johnny Isakson said,

“We do have a history in this country with housing and it goes back to the crash of 1974, which actually in terms of inventory and price declines was comparable to what’s happening now”.

“Within one year of the inception of that tax credit, two-thirds of the available inventory that was on the market was gone. The market moved back to a balanced inventory, values stabilized and things became very healthy. The only reason I know all of that is I was selling houses in 1974, that’s what I was doing to feed my family and make a living.”

The Stimulus Bill that was passed by the house last week will be reconciled with the Bill passed today and may have a final approval as early as Thursday February 5th.

Stay tuned for more information regarding this tax break.  Rates are still great and inventory is beginning to move again!

With so much attention to mortgage rates with recent refinance inquiries and now with increasing purchase activity, banks are exercising the law of supply and demand.  Currently the Fannie Mae 30 year fixed coupon rate is trading in such a fashion that mortgage rates should be near 4.5%.  However, due to the slow banking inquiries over the past 24 months many banks and lenders have downsized their operations to stay afloat.  With a surge in new applications the pipelines are full and the banks are holding rates slightly higher so they can manage the current loans in process.  The capacity of the lenders should be eased in the coming week or weeks as these loans begin to clear the temporary warehouse lines.

Stay tuned and be prepared if you have not already began the refinance process.  It is best to know you current situation and get your loan application started so when the desired rate is available you can grab it before it’s gone!

Call me at 503.798.9183 or email me by clicking on my name –> Conrad Venti.