Tag: fannie mae

Looking at Shadow Inventory

On August 16, 2012, in Foreclosure, Real Estate, by John A. Weber IV, ESQ.

New York Shadow Inventory

Shadow Inventory

The Wall Street Journal had a very interesting article written by Nick Timiraos (a link to the article is provided below) regarding shadow inventory.  The article talks about interesting topics such as the decrease in the new homes being built and its effect on investor interest in REO (bank owned properties) properties.  Freddie Mac analysts are citing the reduction in new home building as a reason why the once assumed over saturated “shadow inventory” is not smothering and hampering the housing recovery.

The Wall Street Journal – August 16, 2012

Foreclosure Defense Attorneys

If you are considering a foreclosed property as an investment and have questions, please call the Law Firm of Vaughn, Weber & Prakope, PLLC at 516-858-2620 to speak to an attorney.

Fannie and Freddie set new short sale guidelines.

On May 1, 2012, in Foreclosure, by Robbie L. Vaughn, Esq.

Fannie and Freddie set new short sale guidelines.

From Freddie

Freddie Mac’s new short sale timelines require servicers to make a decision within 30 days of receiving either 1) an offer on a property under Freddie Mac’s traditional short sale program or 2) a completed Borrower Response Package (BRP) requesting consideration for a short sale under HAFA or Freddie Mac’s traditional short sale program. (BRPs are standardized assistance applications developed as part of the Servicing Alignment Initiative.)
If more than 30 days are needed, borrowers must receive weekly status updates and a decision no later than 60 days from the date the complete BRP is received. This will help servicers who may need more time to obtain a broker price opinion or a private mortgage insurer’s approval on a BRP or property offer.
In the event a servicer makes a counteroffer, the borrower is expected to respond within five business days. The servicer must then respond within 10 business days of receiving the borrower’s response.
Freddie Mac will use the new timelines to evaluate servicer compliance with the SAI and its own servicing requirements.

From Fannie:

Under the new guidelines, servicers will be required to acknowledge receipt of a short sale offer within three business days and notify the borrower within five business days if the information is incomplete. Within thirty days, the servicer must send an evaluation notice or notify the borrower that the offer is still under review. If the offer cannot be fully evaluated within 30 days, the servicer must update the borrower on the status each week thereafter. Servicers will also be required to keep Fannie Mae apprised if a short sale evaluation takes longer than 30 days.

I was recently informed of a short sale that had been in contract for 18 months without a response from the lender/servicer. The buyer finally walked away. Hopefully, these new guidelines will help speed up the short sale process.  However, a  short sale may/may not be in your best interest. Call 516-858-2620 If you would like to speak with an attorney regarding short sales.

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Home Affordable Refinance Program (HARP) changes

On October 25, 2011, in Foreclosure, Message/News Board, by Robbie L. Vaughn, Esq.

Home Affordable Refinance Program

The Federal Housing Finance Agency has announced a series of changes to the Home Affordable Refinance Program (HARP). This is an effort to help some borrowers refinance their underwater home mortgage.

Borrower Eligibility:

  • The existing mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009. Homeowners can determine if they have a Fannie Mae or Freddie Mac loan by going to: http://www.FannieMae.com/loanlookup/ or calling 800-7FANNIE (8 am to 8 pm ET) https://ww3.FreddieMac.com/corporate/or 800-FREDDIE (8 am to 8 pm ET)
  •  The program will continue to be available for loans with LTVs above 80 percent.
  • Borrowers must be current on their mortgage payments with no late payment in the past six months and no more than one late payment in the past 12 months.
  •  Borrowers should contact their existing lender or any other mortgage lender offering HARP refinances.

Read more here.

For assistance with HARP questions, call the Law Firm of Vaughn, Weber & Prakope, PLLC at 516-858-2620.

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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