FHA Mortgage for Distressed Home Owners

On August 23, 2013, in Bankruptcy, Foreclosure, by Robbie L. Vaughn, Esq.

FHA Mortgages After Bankruptcy or Foreclosure

 

The FHA recently released a letter stating that it was reducing the waiting period to get an FHA mortgage after a bankruptcy or foreclosure, to 1 year. This is a big deal because the waiting period had been two years after bankruptcy and three years after the completion of a foreclosure.

However, not everyone will qualify. Borrowers will be required to prove that their household income fell by 20 percent or more for at least six months. That the decrease in income was because of unemployment or another event beyond their control. That they have now recovered and reestablished their credit by making at least 12 months of on-time payments on debts such as a mortgage, rent, or credit account.

Long Island Foreclosure Defense Attorneys

The Law Firm of Vaughn, Weber & Prakope, PLLC is here to assist you. We can be reached at (516) 858-2620.

Bank of America to Reduce Mortgages

On March 9, 2012, in Foreclosure, by Robbie L. Vaughn, Esq.

Bank of America to Reduce Mortgages

According to a recent AFP article:

Bank of America has reached a side agreement with US authorities that could reduce the mortgages of some 200,000 borrowers….Bank of America borrowers are expected to receive reductions averaging more than $100,000…

This is very interesting! We will be contacting BOA today!

Updated on 03/10/12

The Tennessean  reports that:

Underwater homeowners are eligible if they have a loan serviced by Bank of America and were at least 60 days delinquent on their mortgages as of Jan. 31.

Only loans owned by Bank of America or private investors are eligible, and those include mortgages originated by Countrywide Financial Corp. The Calabasas, Calif.-based subprime lender was acquired by Bank of America in 2008.

Loans are not eligible if they are owned or backed by Fannie Mae, Freddie Mac, the Federal Housing Administration or the Department of Veterans Affairs, Simon said.

Bank of America estimated that 200,000 homeowners will be eligible, though it does not anticipate that all of them will take part in the program.

The bank will begin reaching out to homeowners next month. It has three years to complete the principal reductions, but the settlement offers incentives for them to be completed within a year of the settlement’s completion, so Simon anticipated the process would move “fairly quickly.”

Bank of America mortgage customers can call 877-488-7814 to see if they’re eligible and to get more information.

If you are currently in foreclosure or in danger of falling into foreclosure, please call (516) 858-2620 to speak with an Attorney!

NEWS: Change in Foreclosure Process?

On April 6, 2011, in Foreclosure, by Robbie L. Vaughn, Esq.

The following is from a recent New York Times article:

The nation’s top mortgage servicers are expected to sign legal agreements by the end of this week compelling them to change their foreclosure procedures, regulatory officials said Tuesday.

The servicers, which violated state and local laws and regulations governing foreclosures, are agreeing to improve their methods in numerous ways. They will be required to have more layers of oversight and proper training of their foreclosure staff. The oversight will extend to third party groups, including the law firms that do much of the actual work of eviction.

Under the new rules, every homeowner in default will have a single point of contact with the servicer. The servicers will end their practice of foreclosing while borrowers are pursuing loan modifications that might allow them to stay in their homes.

One of the most significant measures in the consent agreement will require servicers to hire an independent consultant to review foreclosures done over the last two years. If owners were improperly foreclosed on or paid excessive fees, they will be compensated.

News: New Fannie Mae Lending Guidelines

On November 20, 2010, in Message/News Board, Real Estate, by Robbie L. Vaughn, Esq.

The Good
Buyers will be allowed to use gifts and grants from nonprofit groups for their minimum five percent down payment.

The Bad
Borrowers who have gone through foreclosure will be excluded from obtaining a Fannie-backed loan for seven years.

The following article is from the New York Times

New Lending Guidelines From Fannie Mae

By LYNNLEY BROWNING

NEW lending guidelines being rolled out by Fannie Mae will make securing a mortgage a lot easier for some borrowers but harder for others.

The rules, effective on Dec. 13, will allow buyers to use gifts and grants from nonprofit groups for their minimum 5 percent down payment, which is the threshold set by Fannie Mae, the government-owned company that sets lending standards and buys mortgages from lenders. (Freddie Mac is considering similar new guidelines, said Brad German, a spokesman.)

Previously, borrowers had to contribute a minimum 5 percent down payment from their own funds, but additional down payment money could be from a gift (though never from a home seller). The exception was for borrowers who put 20 percent down: all that money could come as a gift.

Because many lenders now require a down payment of 10 percent or more, the new rules mean that borrowers will still have to come up with extra funds — either their own or gifts.

Still, “this is definitely going to help upgrade buyers and young couples who for whatever reason don’t have enough money and are getting some from their families,” said Edward Ades, the owner of Universal Mortgage, a broker in Brooklyn.

The gift rules apply only to single-family principal residences, including town houses, co-ops and condominiums, and covers mortgage amounts in excess of 80 percent of the property’s value. Also, there is a limit on the loan balance — $729,000 in high-cost areas like New York City, and $417,000 in other areas.

Now, the not-so-good news.

Fannie Mae is getting tougher on debt-to-income ratios, or the amount of a borrower’s gross monthly income that goes toward paying off all debts. The maximum ratio for those seeking a conventional mortgage will drop to 45 percent from 55 percent under the new guidelines.

The agency is also taking a harder look at payment histories on revolving debt. In the past, if a borrower missed a monthly payment, Fannie Mae ignored it, or required that lenders add a few percentage points to the total balance when calculating the debt-to-income ratio. Now, buyers who have missed a payment will have 5 percent of the total balance added to their ratios.

Mr. Ades said that new hurdle could sink many potential borrowers with student-loan debt that has been deferred.

Susan A. Kreyer, the president of the New York Association of Mortgage Brokers, added that buyers who had bought big-ticket items through financing with delayed payments would also be affected.

In addition, Fannie Mae is scrutinizing people who are at the end of their mortgages, with 10 or fewer payments left. It will now count those remaining balances in the debt-to-income ratios — another departure. Mortgage experts say that older buyers near the end of their loans may now have a tougher time securing a loan for a second home.

But perhaps the toughest news from Fannie Mae concerns borrowers who have gone through foreclosure. They will be excluded from obtaining a Fannie-backed loan for seven years, up from four. “That’s a long time in this economy,” Ms. Kreyer said. That change was announced separately from the gift and debt rules, but will also take effect in Fannie Mae’s automated underwriting systems next month.

Fannie Mae buys or guarantees around $3.2 trillion in residential loans, about 28 percent of the entire residential mortgage market in the United States. Lenders typically issue loans based on the agency’s guidelines.

Buyers who do not meet the new Fannie Mae requirements may have to consider a nonconforming loan from the Federal Housing Administration. These loans, which do not follow Fannie Mae underwriting guidelines, require mortgage insurance premiums and, for those with low credit scores, higher interest rates and steeper down-payment requirements.

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