Bank of America’s new program….“Mortgage to Lease”
Last month, Bank of America announced a pilot program that will provide some distressed property homeowners with a new foreclosure alternative. This new “Mortgage to Lease” program will allow homeowners facing foreclosure to remain in their homes by converting from home ownership to rental.
In this program, participating homeowners will transfer their home titles to Bank of America for forgiveness of all outstanding mortgage debt. Then Bank of America will lease the home to the former homeowner for up to three years at a rental price less than their mortgage payments, making payments affordable. After the three-year rental period, Bank of America will sell the acquired houses to investors.
For now, the “Mortgage to Lease” program will only affect 1,000 specifically selected Bank of America customers in Arizona, Nevada, and New York. During this initial phase, Bank of America will explore customer, community, and investor reactions and assess the feasibility and practicality of expanding the program.
In order to qualify, the homeowner must meet the following criteria:
- Have a Bank of America loan without junior liens
- Be delinquent 60 days on their mortgage payments
- Be “underwater” on their mortgage
- Must have exhausted other foreclosure alternatives
- Foreclosure must be eminent
- And the homeowner must be occupying the home
Because this program has received national media attention, you may receive questions from homeowners about it. If you do, you can simply explain that this program is tiny and for now will affect less than one-tenth of one percent of all the homeowners with a problem. Remember, Bank of America will be hand-selecting and notifying homeowners for the initial launch.
The HARP 2.0 refinance program is available starting today, Monday March 19, 2012…
The HARP 2.0 refinance program is available starting today, Monday March 19, 2012 and is expected to bring mortgage relief to homeowners who are current on their home mortgage, but have been unable to refinance because of their negative equity status.
The full implementation of the revamped HARP 2.0 program, which was announced by President Obama in October 2011, has taken five months to come into play. The HARP 2.0 refinance program was available on a manual basis for a homeowner’s current servicer, the series of changes that the computerized version of the program is undergoing will increase the volume and speed of applications processed.
To be eligible for a HARP 2.0 refinance program, you can either use this HARP eligibility calculator with detailed eligibility explanations or follow the general guidelines below:
1. Your loan must be owned or guaranteed by Fannie Mae or Freddie Mac. If you are unsure if you have a Fannie or Freddie loan, you can check both Fannie Mae and Freddie Mac’s websites or you can call their toll-free number for confirmation.
• Fannie Mae: http://www.fanniemae.com/loanlookup/ 1-800-7FANNIE (8 am to 8 pm ET)
• Freddie Mac: https://ww3.freddiemac.com/corporate/ 1-800-FREDDIE (8 am to 8 pm ET)
2. You must have closed your current loan on or before May 31, 2009.
3. You must not have made a late payment within the past six months and have had no more than one late payment within the past 12 months.
4. Your loan must fall under the current conforming loan limits. If you are unsure, you can find out here: http://themortgagereports.com/loan-limits/
If you mete the general guidelines, what’s next?
Contact your current loan servicer to see if you are eligible to see if your loan qualifies for the HARP 2.0 refinance program. Then ask them if they can assist you in applying for the program.
*Caveat: just like traditional refinancing…shop around and compare, fees, rates and lender service levels.
HARP Program specific contact information for major mortgage servicers with whom you already have a mortgage through (not for new loans or shopping for a new servicer):
Bank of America: 1-800-846-2222
Wells Fargo: 1-877-937-9357
Chase: 1-800-848-9136
Citi: 1-800-283-7918
US Bank: 1-866-932-0462
After More Than a Month, $25B Settlement Filed in Court
State and federal officials and five of the largest servicers –Bank of America, J.P. Morgan Chase, Wells Fargo, Citigroup, and Ally Financial – settled on February 9, outlining an agreement to address faulty practices in the mortgage industry and to deal with issues regarding wrongful foreclosures.
$20 billion in relief will help homeowners through principal reduction and refinancing for underwater homes, principal forbearance for unemployed borrowers, short sales assistance, and additional benefits for service members.
(Source: DSNews)
Bank of America offers principal reductions in amounts exceeding $100,000
Some Bank of America borrowers may be in for principal reductions in amounts exceeding $100,000, according to the latest developments in the settlement the bank and four other large servicers made with state and federal regulators. While the other four servicers in the national settlement are being required to diminish principal so underwater borrowers have loan-to-value ratios of 120 percent or less, BofA will be reducing principal for about 200,000 homeowners to fall in line with current market values.
(Source: DSNews)
Wells Fargo pays employee incentives for mortgage workouts…
Wells Fargo ($30.96 0%) installed an incentive program that pays its single-point-of-contact employees more if they reach some sort of workout in lieu of foreclosure.
Mortgage servicers must install single points of contact for borrowers on the verge of foreclosure, based on federal regulator consent orders signed in 2011, new Home Affordable Modification Program guidelines and the servicing standards set as part of the attorneys general settlement in February.
For more information click here.
Federal Inquiry Concludes “Crisis Was Avoidable”
In May 2009, Congress established the Financial Crisis Inquiry Commission to investigate the causes of the worst financial crisis since the Great Depression. The 10-member commission released the results of its findings in a scathing report published Thursday. Their conclusion? The housing collapse and the economic crisis that followed could have been averted. The panel spread blame across a wide gamut, from Wall Street to Main Street to Pennsylvania Avenue, and warned that the impacts of this crisis are likely to be felt for a generation. » Read More
Freddie and Fannie end their temporary ban on selling foreclosed homes
Freddie Mac and Fannie Mae have recently ended their temporary ban on selling foreclosed homes in the latest installment of the “Robo-Signing Scandal.” After cutting ties with the law firm that allegedly forged signatures and hid flawed files from auditors, the two government-sponsored entities (GSEs) have given brokers the green light on marketing foreclosures or completing the sales of those already under contract.
Freddie and Fannie own or guarantee about half of all U.S. home mortgages. With 31 million loans worth about $5 trillion, the two GSEs are significant players in the distressed property market. Around 1 percent (250,000) of Freddie’s and Fannie’s mortgages are foreclosures, while another 8 percent (2.48 million) are currently delinquent.
(Source: Calculated Risk Blog)
Mortgage Metrics Report for Second Quarter of 2010
According to the Mortgage Metrics Report, mortgage delinquency levels remained steady but elevated after rising for several quarters. Completed foreclosures were up, while newly initiated foreclosures were down. Mortgage modifications were also up and an increasing number of more recent modifications, which decreased borrowers’ monthly principal and interest payments, performed better than earlier modifications.
Other key findings included:
- During the second quarter, 87.3 percent of mortgages were current and performing—unchanged from the previous quarter but a decline from 88.6 percent in the same quarter a year earlier.
- The number of mortgages that were seriously delinquent (60 or more days past due) and newly initiated foreclosures fell during the quarter to the lowest levels of the last 12 months, but were up from a year earlier.
- Mortgages that were 30-to-59 days delinquent increased during the quarter, consistent with seasonal trends. Early-stage delinquencies increased across all risk categories from the previous quarter, but were down from a year earlier for prime, Alt-A, and subprime mortgages.
- Servicers initiated more than 292,000 new foreclosure proceedings during the second quarter—the fewest new foreclosure proceedings of any of the previous five quarters.
- Completed foreclosures, in which borrowers lost their homes, increased by 7 percent during the quarter to nearly 163,000—a 54 percent increase from a year earlier, as the large volume of seriously delinquent mortgages and foreclosures in process worked through the system.
(Source: U.S. Dept of Treasury)
How Resilient is the U.S. Economy Proving to Be?
While some indicators released during the week were weaker than expected, worries that real GDP could slip into negative territory seem to be overblown. Second-quarter real GDP was revised up slightly to a 1.7 percent annual pace. The modest upward revision in personal consumption more than offset declines in structure and government outlays.
Our current forecast has the economy expanding at around a 2.0 percent annual rate in the second half of the year and just 2.2 percent in 2011. Moderate growth in the second half of the year reflects continued positive contributions from consumer spending, equipment and software outlays and government purchases. While some progress has been made, the economy still faces huge challenges.
Another hurdle for consumer spending will be the outlook for housing prices. The S&P Case-Shiller Index of home prices was released this week and showed prices in the 20 largest metropolitan areas fell 0.13 percent on a seasonally adjusted basis, the first decline since March. The decline is not a surprise, because recent gains in home prices have been driven by a rise in sales volume fueled by the homebuyers’ tax credit.
Home prices will likely remain under pressure in coming months as foreclosures and distressed transactions account for a larger portion of total sales. On a trend basis, states with the highest percentage of seriously delinquent mortgages and high vacancy rates are seeing the largest declines.
On a positive note, personal income and spending both posted better-than-expected gains in August. Personal income excluding transfer payments was flat for the second consecutive month. Transfer payments likely put a floor on income growth, which suggests true income gains could have little upside momentum.
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Linda Munoz
415-496-2967
Linda.K.Munoz@pmahomeloans.com
Think you can’t buy a home after a foreclosure or bankruptcy? Think again…
Think all is lost after a bankruptcy or foreclosure? Think again! The Golden1 Credit Union is offer homeowners who’ve gone through a bankruptcy or had their home foreclosed upon is offering a new loan program called Mortgage Repair Loan
Qualified individuals who have lost their home to foreclosure, or may be facing foreclosure, may qualify for a new mortgage loan and:
- Receive a fixed-rate loan with a variety of terms
- Finance up to $417,000 to purchase a new home
Golden 1 requires borrowers to be:
- Employed
- In the same job for one year
- Have 3 years of experience in the same industry
- Have a Golden 1 checking account with direct deposit
If you are a homeowner that is facing foreclosure, bankruptcy or a short sale Golden1 could potentially get you to homeownership faster than the 2-5 year time frame if you get a Fannie Mae backed loan. Check it out, https://www.golden1.com/aboutus/mortgageassistance.aspx
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