Charlotte Real Estate Blog

Home affordable refinance information

March 9th, 2009 9:10 PM

Fannie Mae and Freddie Mac have just released details on how they will handle refinance transactions authorized by the Home Affordable Refinance program. The complete details of both programs can be found by accessing the program guides from Fannie Mae and Freddie Mac, but we will discuss some of the highlights below.

In the case of all loans, they have to be delivered back to the existing owner of the loan today. Meaning, if Fannie Mae is the owner of the loan, the loan must be delivered to Fannie Mae and underwritten according to their guidelines. The same is true for Freddie Mac.

As a borrower you need to find out who owns the loan. As a borrower you have the ability to do this by contacting the servicer and asking...or I can help do this for you by using the links below. Note that the property address must be entered exactly as the agency has it on file, or it may not be found (ie: Rd or Road? St or Street?

Does Fannie Mae Own Your Mortgage?

Does Freddie Mac Own Your Mortgage?

Fannie Mae

Let's look at the difference between the types of refinancing available from Fannie, and know which you can qualify. The primary difference for originators is as follows between the two programs..

DU Refi Plus

Available to all Fannie Mae approved lenders using DU; borrower must credit qualify.
Available across all lending channels (retail, wholesale and correspondent).

Refi Plus

If you NOT qualify for DU Refi Plus, you may still be able to refinance, but would have to work directly with the current servicer, or one of the servicer's affiliates or retail channels.

Applications may be taken now, but DU Refi Plus loan findings may not be available until early April. As such, they will include the MI flexibility that is outlined in the guidelines from the agencies linked above. Fannie has also said that other enhancements may not be added to DU until early May. Again, this does not mean these loans cannot be originated - but you will have to check with your individual investors as to their position on these files.

Many of the guidelines are similar for both DU Refi Plus and Refi Plus. Similarities include:

That the borrower must be receiving either a lower mortgage payment or moving to a more stable type of product like an ARM to a Fixed-Rate. ARM programs are available but must have initial fixed periods of five years or greater.
The maximum LTV is 105%. There is no limitation on CLTV, but 2nd lien holders will need to re-subordinate.
If PMI does not exist on the loan today, it will not be required on the new loan, regardless of LTV. If PMI does exist on the loan, the loan will be required to be re-insured through the existing PMI company.
LLPA's (loan level pricing adjustments) exist for both loans, see guides for details or consult your investors.
The availability for appraisal waivers will exist in limited situations.

Freddie Mac
The Freddie Mac guidelines are somewhat similar to Fannie Mae's, but if you go through the detailed guidelines linked above, you will see they are a bit more vague at this time.

If you have any questions regarding your current situation please feel free to contact us at any time. We are here to assist. Every lender that we work with is going to have a different overlay as to how they will handle this program but it is sure to help quite a few people.

Posted by Angelo Datseris, CRMS on March 9th, 2009 9:10 PMPost a Comment (0)

Subscribe to this blog

What an Obama Administration means to your mortgage

December 3rd, 2008 5:33 PM

The debates are done, the election is over, and on January 20, 2009, Barack Obama will be inaugurated as President of the United States. No matter where you fall in the political spectrum, no one knows for sure exactly what this will mean to the future of our country. With this in mind, let's put all politics aside, and take a closer look at Obama's plan for our future. And since a home is still the biggest, most important investment you'll ever make, we'll focus the limited space of this short article on Obama's basic housing measures.

More Economic Stimulus – Since trouble in the economy won't wait until January 20th, plans for another economic stimulus package are already in the works, so we might even see this happen, in one form or another, before Obama takes office.

Obama has also discussed a housing stimulus as well, to stem the tide of foreclosures, including a temporary 90–day freeze on foreclosures, as well as measures to address the demand side of the housing issue. This package includes $25 billion in state fiscal relief, which Mortgage Law Central says will help avoid "painful property tax increases."

Obama also wants to "aggressively and comprehensively" implement the recently–passed rescue plan and the Hope for Homeowners Act. This means the Treasury, HUD, Fannie Mae and Freddie Mac, and all of the banks and loan servicers who benefit from the rescue bill will continue to coordinate broad mortgage restructurings and loan modifications for struggling homeowners. No one knows for sure exactly how this will be implemented or what it even looks like yet, but we'll keep you updated as the details are released.

Reformed Bankruptcy Laws – Obama has promised to repeal the 2005 bankruptcy bill. A controversial measure, this will allow judges to alter mortgage terms during a bankruptcy, providing more protection for struggling homeowners.

New Mortgage Interest Tax Credit – Obama is expected to create a 10% universal mortgage interest credit for those who don't currently itemize. This means about $500 in savings for 10 million American homeowners.

Protection Against Mortgage Fraud and Predatory Lending – During the campaign, Obama blamed the financial crisis on lax government regulations, so look for tougher regulations, new criminal penalties for mortgage fraud violators, more funding for enforcement programs, more detailed loan disclosure laws, new counseling programs and other consumer protections, including a new Home Obligation Made Explicit (HOME) score (kind of like a new APR calculation) to help borrowers better understand and compare mortgage costs during the mortgage process.

This will go a long way in protecting new home buyers from the opportunists that have given good mortgage professionals like us a bad name in the last few years. And since so much of our business depends on referrals from satisfied clients, the good news is a lot of these people are now out of business. We hope that any new measures introduced by the Obama administration will help keep a new breed of copycats from invading our industry as the real estate market begins to change for the better in 2009 and beyond. From now until the end of the year, you can expect volatility to continue in the financial and credit markets. This means mortgage rates, too, so if you or anyone you know is looking to buy or refinance a home, give us a call. We monitor the performance of mortgage–backed securities on a daily basis, which allows our clients to capitalize on changes that will help lock in the best rate for their individual goals and needs. Also, if you'd like to discuss any of t hese or other changes that could affect your mortgage, don't hesitate to give us a call.

Posted by Angelo Datseris, CRMS on December 3rd, 2008 5:33 PMPost a Comment (0)

Subscribe to this blog

Save our Industry! HR 3915 Mortgage Reform Anti-Predatory Lending 2007

November 1st, 2007 10:21 AM

Ladies and gentleman, I want to thank those who have decided to read my blog. I'm not sure if everyone is aware of what is going on so I will get right to the point. HR 3915 is a bill that they are trying to pass which will in essence inflict unintended harm to borrowers looking to obtain financing for the american dream. If they pass this bill it will increase the cost of financing 10 fold to the consumer, it will raise interest rates and if that isn't bad enought it will make lending to first time homebuyers and low income families practically impossible. In addition to the borrowers/consumers mortgage professionals across the country will be facing extinction. It will drive more and more lenders out of business and the economy will come to a standstill! Please write and express your concern. I will provide a sample letter for those of you that would like to fight for the future of home ownership! Below is a summary on the bill.

On Monday, October 22, 2007, House Financial Services Committee Chairman Barney Frank (D-MA), along with Representatives Miller (D-NC) and Watt (D-NC), introduced H.R. 3915, the "Mortgage Reform and Anti-Predatory Lending Act of 2007." Below you will find the full H.R. 3915 bill, a section by section summary, the NAMB Press Release, and NAMB’s Testimony presented before the HFSC.

The bill contains three sections. Title 1 will create a federal duty of care and outlaw steering. The anti-steering language will outlaw incentive compensation and YSP that varies with the terms of a loan. The section will allow indirect compensation if disclosed early in the process. This section also creates a minimum licensing standard for all originators and net worth or bond requirements of $100,000.

Title 2 creates an ability to repay standard and hardwires underwriting guidelines. Underwriting will include a verified ability to repay and take into account amortizing payments. Guidelines will also include taxes and insurance payments when calculating ratios. For refinancing, the act will define and require a net tangible benefit. For prime loans, there is a safe harbor. However, for subprime there is assignee liability and expanded rescission rights. Standards will also create a defense to foreclosure. Severe restrictions will be placed upon first-time homebuyer mortgages with negative amortization features.

Title 3 will expand the existing Section 32 of TILA by reducing the points and fees triggers and expand lender liability. Prohibitions include no balloon loans, no lending without regard to ability to repay, prohibit a pattern or practice of making such loans, restrict late fees, and prohibit the financing of any points/fees. Taken together, the expansive liability and prohibited terms and conditions will make Section 32 lending practically impossible.

“The indirect compensation mortgage brokers receive from lenders is a defendable fee that actually lowers closing costs to consumers. It is an imperative tool for first time homebuyers, and critical to enable so many people to own a home and manage their finances.”

Thanks for reading to all those who have read this. I stongly urge all my clients, friends and family to write Barney Frank (D-MA), along with Representatives Miller (D-NC) and Watt (D-NC), and express your concern on this. If you have any questions please feel fee to contact me at your earliest convenience.

Posted by Angelo Datseris, CRMS on November 1st, 2007 10:21 AMPost a Comment (0)

Subscribe to this blog