CHDAP Suspension Will Affect California RE Agents Homebuyers

Posted in Real Estate by Jake on January 28, 2013 No Comments yet

CHDAP Down Payment Assistance is temporarily suspended by CalHFA due to discrepancy by HUD.

 

“This temporary measure is a result of the Department of Housing and Urban Development’s (HUD) recent interpretive rule governing a provision of the Housing and Economic Recovery Act of 2008, that affects how all Housing Finance Agencies (HFAs) provide down payment assistance on FHA-insured loans. HUD’s interpretive rule requires HFAs to provide such assistance directly at closing. Under this interpretive rule, it is not permissible for HFAs to purchase down payment assistance loans from lenders after the loan is closed, which is the way CalHFA currently conducts business with all its approved lenders under state law. First mortgage loans combined with subordinate loans not complying with HUD’s recent interpretive rule may be uninsurable by FHA. HUD’s interpretive rule is effective for loans closed on or after November 29, 2012. Again, this only applies to CHDAP loans combined with FHA-insured first mortgages.

 

CalHFA is aggressively pursuing several solutions to again offer CHDAP loans, which we expect to release in the near future. For questions about this bulletin, contact the CalHFA Single Family Division by phone 916-326-8000; fax 916.327.8452; or email sflending@calhfa.ca.gov. In addition you can always visit CalHFA’s web site at: www.calhfa.ca.gov or Single Family Lending at www.calhfa.ca.gov/homeownership.”

 

PAY CLOSE ATTENTION TO YOUR BUYER’S PRE-APPROVAL. IF THEY ARE USING CHDAP WITH AN FHA LOAN THEY WILL NOT BE ABLE TO MOVE FORWARD AT THIS TIME.

The Real Estate Financing Rules Are About To Change Thanks To Dodd-Frank!

Posted in Real Estate by Jake on November 28, 2012 No Comments yet

With the Dodd Frank bill having no chance for repeal it looks like we will have to live with their new proposed rule changes.  Most of these new rules that will affect the lending community center around Owner Occupied residential consumer deals and will start in January 2013.  In essence,  the hard money lenders have one more month to close Owner Occupied hard money deals before this necessary piece of the lending world is turned upside down.  Some of the changes that will wildly affect the “Hard money” space are listed below.

 

-NO financing ANY lender or broker points within the loan!  Yes this means that the borrower will have to pay the points out of their savings or finance it on a credit card….no joke!

-NO Prepays protection will be allowed to the lender!  This will not allow Lenders to do loans for no points, further restricting the already limited points that you can charge all to go to the broker!

-No Balloon payments will be allowed! This will make the vast majority of lenders exit the O/O hard money space because they are use to short term commitments and forcing them into 30 year fully amortized loans is not the model that fits the niche.  All the hard money brokers that use private investor money will not be able to talk their investors in to a 30 year loan…for the same reason!

-All borrowers that do still want to get Hard Money/Alternative lending loans on their home will be FORCED to attend Consumer counseling set up by HUD.  This will just create  another entry barrier to obtaining financing on their home!

 

So… these changes that are right around the corner will wildly affect the cost of capital to the consumer in a negative way.  If you are a real estate or lending professional that has or had a borrower entertaining using Alternative lending to get them in to their home of their dreams or getting the capital they need,  you should submit your loan request immediately and plan on closing the loan in December!  If you are a home buyer trying to take advantage of the current housing either because of the loss of another home through short sale or foreclosure, or you just want to buy NOW and need hard money to do so, you need to act quickly!

 

Most lenders are committed to staying in the O/O alternative lending business after the Dodd Frank rules are implemented in January,  but closing an O/O loan this month will be easier and more profitable for you by far!  Get your O/O financing before the cost of capital goes through the roof!

Short Sale Timeframes… Help On The Horizon

Posted in Short Sales by Jake on August 12, 2012 No Comments yet

Stockton Representative, Jerry McNerney, has introduced a bill to speed up the short sale process by requiring junior lien holders (2nds, HELOCS, etc.) to make a decision on a short sale within 45 days.  The bill, titled Fast Help For Homeowners (FHFH) Act, received strong support from the National Association of Realtors(NAR).   “Second mortgage lien holders frequently hold up and cancel the short sale transaction while trying to collect the largest possible payout in exchange for releasing the homeowner’s lien, even though the secondary lien holder often gets nothing if the home ends up going into foreclosure,” said NAR President Moe Veissi, in a statement.  “While efforts have been made to improve primary lien holders’ response times, issues still abound with second and subsequent lien holders, and this legislation is a step in the right direction. “ If the lender does not make a decision within that 45 day time frame, the short sale will be deemed approved on the 46th day.  California Association of Realtors, which is urging fast passage, conducted a recent survey that found that nearly half of all properties sold as short sales in California had subordinate liens.

This would be welcome legislation if it makes it into law.  One of the biggest problems we are facing as Realtors in this market is keeping those buyers who are in contract from pulling out of their deals.  Excessive time only leads to impatience and “wandering eye syndrome”.  When there is a solid offer in place that has been agreed to by the principals, there is absolutely no good reason why lenders should be taking 3 to 6 months to approve or counter the offer and complete the short sale transaction.  The proposed legislation would force any junior lien holders to engage immediately and accept the fact that the lien they hold has a higher risk and they are not in a position to dictate terms.  They knew it when they made the loan, and the fact that the market made a mockery of the mortgage industry just goes with the territory.  I’m glad to see FHFH and look forward to it’s implementation.

Up and Down: Seesawing Mortgages

It’s not hard to see the effects of a distressed economy. Jobless claims, mortgage loans, rates and delinquencies, foreclosures and short sales rise and fall. Just this November, headlines under mortgages in inman.com prove that the country’s real estate industry is ever changing and ever inconsistent. Obviously, thanks to the big help coming from the White House, many Americans are still unemployed, homeless, and in debt.

Let’s trace the headlines back to the first week of the month.

November 3, 2011 — Mortgage rates stay in the basement

“Mortgage rates sagged this week as ongoing concerns about the European debt crisis had investors fleeing to the relative safety of mortgage-backed securities that fund most U.S. home loans.”

November 9, 2011 – New settlement disclosure form to replace HUD-1

A prototype for a new unified settlement disclosure form may replace the separate HUD-1 Settlement Statement and Truth in Lending disclosure form which is currently used. Should the new forms’ designs are finalized, consumers will receive a unified loan disclosure form when they apply for a mortgage, and a unified settlement disclosure form if they want to purchase a home.

November 10, 2011 – Low rates sparking demand for mortgages

Low rates of mortgage loans increased demand to purchase mortgages and refinancings.

November 11, 2011 – 10 guilty pleas in scheme to take control of Las Vegas HOAs

“Federal prosecutors have negotiated guilty pleas with 10 defendants for their alleged involvement in a scheme to take control of as many as a dozen homeowners associations in Las Vegas in order to file construction defect lawsuits against builders and then win contracts to do remediation work.”

November 17, 2011 – Mortgage rates near historic lows for third straight week

Mortgage rates remain low for the third consecutive week averaging 4% and still nearing the all-time low of 3.94 percent in the week ending October6.

November 17, 2011 – Congress votes to restore FHA loan limits

The Congress and Senate vote  with 298-121 and 70-30, respectively, to restore FHA’s ability to insure loans of up to $729,750 in high cost markets through 2013.

November 23, 2011 – Economic worries keep lid on mortgages rates

Mortgage rates reach record lows for the fourth consecutive week in November for the week ending November 23, which is down by percent last week and 4.4 percent a year ago, according to Freddie Mac’s Primary Mortgage Market Survey.

 

Source: www.inman.com/news/category/Mortgages

Mismanagement of the $1B Housing Program

Posted in Real Estate, Wholesale And Rehabs by mrdublin on November 22, 2011 No Comments yet

Where has all the money gone?

It should be understandable that you have forgotten about the $1B federal housing program called “Emergency Homeowners’ Loan Program” which the government allotted to help distressed homeowners work through their mortgage situations.   The program gave up to $50,000 of no-interest loans which will be forgiven if their recipients stay in their homes for five years.

Only a little more than half of the $1B was used and the other remaining money was sent back to the U.S. treasury. Meanwhile,  government data showed that three states got the majority of shares in the program.  The fund, which the government based on population and unemployment rate, was supposed to be used by 32 states and Puerto Rico.

However,  another failed government attempt occurred as mismanagement of funds and misappropriations resulted in Pennsylvania, Maryland and Connecticut receiving the lions share– according to the figures released by the Department of Housing and Urban Development.

In addition, the program, targeting 30,000 homeowners,  expired on September 30, with merely 12,000 applicants approved.

Loop holes, come one, come all!

Loop hole # 1: Why did the government leave half of the $1B unspent? Don’t tell me you only have 12,000 applications approved. If you were really targeting 30,000 homeowners, why would you set a stupid deadline?  It’s either you have a target date or a target number.  Besides, if you really wanted to help, you don’t have to be so strict.  After all,  you do want to help people and not punish them, don’t you?

Loop hole #2: Why were there misappropriations on the budget?  The amount spent exceeded the target budget in some states while in other states the budget was below the line.  For instance, Pennsylvania, Maryland and Connecticut were budgeted at $179 million each but because they used up their initial funds,  HUD decided to give them $46 million more.

Places with the most homeowners receiving preliminary loan approval under the Emergency Homeowners’ Loan Program:
State

Homeowners

Pennsylvania

3,053

Maryland

1,444

Connnecticut

1,070

Texas

876

Massachusetts

568

Puerto Rico

468

Source: USAToday.Com and Department of Housing and Urban Development

 

More Details from USAToday.Com:

  • HUD initially expected almost 22,000 homeowners to get help in the other 27 states and Puerto Rico. Only 27% of that goal was reached, preliminary numbers show.
  • Puerto Rico fared best. With funds to help 652 homeowners, it got 468 preliminary approvals, or 72%. South Dakota hit 52% of its maximum allocation.
  • In five states — Utah, Iowa, Arkansas, Missouri and North Dakota— less than 10% of the expected number of homeowners received preliminary approvals. North Dakota’s allocation allowed for 43 borrowers to get help; just four got preliminary approvals.
  • New York state has 458 preliminary approvals — 17% of its maximum allocation for 2,633 loans. Its total will likely go up because a data transmission problem delayed some applications there, Sullivan says.

HARP Revealed: Thoughts for the Home Buyers and Home Sellers

Posted in Real Estate by mrdublin on October 28, 2011 No Comments yet

Thousands of Americans will find mortgage relief in what the Obama Administration claims is an attempt to prevent economic and political fallout in housing crisis. This move is in direct correlation to Obama’s new rules on federally guaranteed loans, as part of his efforts to address economic troubles and various challenges faced by homeowners and investors.

The Obama’s Administration made the efforts despite the Republicans’  block on a majority of his proposals. But critics said it’s finally time that the President make a move to improve (or technically, save) housing in the country. In fact, his lack of action with respect to the home foreclosures and other housing crisis has resulted in demands from his own allies to do something!

These new bailout plans known as the Home Affordable Refinance Program (HARP 2.0), however, are questionable in terms of scope of benefits. Under this proposal, homeowners who are still current on their mortgages are still able to refinance even if the value of their home has dropped lower than what they still owe. But what percent of the population can benefit from it? Will it really be that beneficial to majority of people suffering from mortgage debt?

An explanation of the things one should consider before thinking they could benefit from the mortgage bailout plan was revealed in an interesting feature article:

Will you qualify for the revised HARP (HARP 2.0) program…will this program really work to ‘save housing’?

…few things to consider:

  1. There are 11,000,000 underwater owners in the US. (and growing). Estimates are that HARP 2.0 can only ‘help’ 10% of those underwater owners…big reason, the owner must be current on their mortgage. If you are late, don’t apply. Of the estimated 11 million underwater owners nearly half are already behind on their payments, in default.
  2. HARP 2.0 has nothing to do with homes already foreclosed. There are millions of homes readying to become REO listings over the next 12-24 months. Millions of homes that will be put for sale and discount prices. What effect will this have on property values?
  3. 3) Did HARP 1.0 work? The HARP program in its current form has fallen well short of its intended target of 4-5 million homeowners, helping just 894,000 of which only 70,000 were significantly underwater.
    4) THE BANKS have to agree to participate in HARP 2.0. Its estimated that the banks will ‘lose’ 15,000,000,000 (15 BILLION) if they participate with this new program. Do you think banks will be eager to participate in 2.0?
    5) AND THE BIG QUESTION….how many owners does the Obama Administration think HARP 2.0 will help? Their answer…’Time will tell’. In other words, they have no idea.

So, I ask you….does the new HARP 2.0 offering any real substance and hope or will this program follow the same path as HAMP and all the other failed efforts?”

Courtesy: Real Estate Insider News