Mortgage News and DPA

What is happening today in mortgage lending:

Mortgage firms pay false advertising fineshttp://blog.seattlepi.nwsource.com/consumersmarts/archives/145539.asp

Guest column: Down-payment assistance important in housing market
http://www.greenbaypressgazette.com/apps/pbcs.dll/article?AID=/20080808/GPG0703/808080674/1247/GPG03


Freddie Mac issues Bulletin August 8, 2008
With this Single-Family Seller/Servicer Guide (Guide) Bulletin, Freddie Mac is amending Guide Section 17.2, Provisions for the payment of fees and proceeds and application of delivery fee credits.
We are also making the following changes to our postsettlement delivery fees (delivery fees), effective for all Mortgages sold to Freddie Mac under flow Purchase Contracts with Freddie Mac Settlement Dates on or after November 7, 2008:
■ Increasing the Market Condition delivery fee rate
■ Adding a new Indicator Score range, revising the Indicator Score/Loan-to-Value ratio delivery fee rates and adding new delivery fee credits for Mortgages with certain Indicator Score/Loan-to-Value combinations
■ Increasing cash-out refinance Mortgages Indicator Score/Loan-to-Value delivery fee rates for cash-out refinance Mortgages with certain Indicator Score/Loan-to-Value combinations
■ Increasing Credit Score/Loan-to-Value (CS/LTV) delivery fee rates for certain A-minus Mortgages, other Caution Mortgages and Non-Loan Prospector® Mortgages
■ Increasing the Investment Property Mortgage delivery fee rates
Read the entire bulletin
http://www.freddiemac.com/sell/guide/bulletins/pdf/bll080808.pdf

Mortgage Education News

What is happening today in mortgage lending:
I strongly believe in our continuing education in the mortgage business. This mornings email is dedicated to give you ideas how you can continue your education in mortgage lending. Remember I am also a CE instructor and can give you training in your offices.

• AllRegs Delivers FHA Hotline Support Service for Mortgage Lenders "AllRegs FHA Hotline" Service Helps Mortgage Companies Clarify FHA Loan Program Details and the New Housing Law
  http://www.marketwatch.com/news/story/allregs-delivers-fha-hotline-support/story.aspx?guid=%7B224A3183-2E3B-4DB4-B789-D1B2B26F6E71%7D&dist=hppr
• My blog (link below) has a list of on line sites that give you on line sessions and most are free.
• Radian is offering free training classes

-AUG 21-22 Southtowne Expo
Cordially invites you to
Attend our free training class at
The South Towne Expo Center
Thursday August 21, 1:00- 4:30 PM
&
Friday August 22, 9:00-12:00 PM
Refreshments will be served throughout each class.
A continental breakfast will be served on Friday.
Please fax or email the RSVP to reserve your seats.
Invite all co-workers to attend
We look forward to seeing you there!
Thank you,
Steve Thornley <mailto:stephen.thornley@radian.biz>

MIP News

What is happening today in mortgage lending:

The following MGIC rate and underwriting changes take effect today, August 4, 2008:
Rate Changes
MGIC's basic monthly premium rates have increased.
A few LPMI rates have changed.
The premium adjustment factor for loan amounts greater than $417,000 has increased.
Standard Monthly, ZOMP! and Expanded Criteria rate charts now include a premium adjustment factor for loans with a maximum 25-year amortization.
Note: Rate changes are not yet effective in all states.For the most current rates, go to our newly updated Rate Finder or download the appropriate rate card.
Underwriting Changes
Cash-out refinances are once again eligible to a maximum LTV of 90% in non-restricted markets or states.
The following states are limited to a maximum LTV of 90%: AZ, CA, FL and NV.
For more information, please see our Underwriting Guidelines Summary and our Restricted Market Look-Up Tool.

Mortgage News

What is happening in mortgage lending today:
You will see lenders soon change their pricDelivery Charge and Flow Business Pricing Requirements https://www.efanniemae.com/sf/guidesing again. Fannie Mae just issued bulletin 08-18 Updated Adverse Market /ssg/annltrs/pdf/2008/0818.pdf

Time to lock in your mortgage rate Home buyers may find big savings in locking in mortgage interest rates.
http://money.cnn.com/2008/08/04/real_estate/mortgage_rate_lock/?postversion=2008080408

We can hope that the credit crisis has been over blown. Check out this article it was in Business Week and CNN Money
So far, insurers don't show big 2Q mortgage losses
http://www.businessweek.com/ap/financialnews/D92B06E80.htm

Mortgage News

What is happening today in mortgage lending:
Just when we thought the DPA's would soon become a thing of the past, new hope comes. Check out this article from Fox Business. Also in case your are wondering what bipartisan means...Representing or supporting by two parties. The way they throw the word bipartisan around the more I have to remind myself what it really means.
AmeriDream Applauds Bipartisan Legislation to Preserve Charitable Downpayment Assistance
http://www.foxbusiness.com/story/ameridream-applauds-bipartisan-legislation-preserve-charitable-downpayment/


I was reading this article and I had to ask myself what in the world were Lenders thinking when they came out with some of these programs? Do you remember a year ago when we woke up one morning and it felt like the whole bottom came out from what we had been doing in mortgage lending? If we had only know then what we know now or maybe it was best we didn't know. Check out this article.
In mortgage crisis, look for the signs of recovery
http://www.signonsandiego.com/news/business/calbreath/20080803-9999-1b3dean.html

Mortgage News

What is happening today in mortgage lending:
August 1, 2008
Last night, Congress introduced bipartisan legislation, H.R. 6694 <https://www.ameridream.org/Documents/Congress/HR6694.pdf> that would reauthorize and reform charitable downpayment assistance. This bill would remedy a harmful provision in the new housing law which limits homeownership opportunities for low and middle-income Americans. The legislation, sponsored by U.S. Reps. Al Green (D-TX), Gary Miller (R-CA), Maxine Waters (D-CA), and Christopher Shays (R-CT) reauthorizes and reforms charitable downpayment assistance funded in part by sellers, which has helped over one million families and individuals become homeowners since 1999. The program was eliminated by legislation signed by President Bush on July 30, 2008.
The Green-Miller-Waters-Shays plan would re-authorize and reform non-profit downpayment assistance and secure it as an allowable source for FHA borrowers. The bill seeks to ensure that providers of the downpayment assistance operate in a transparent manner to guard against conflicts of interest. The bill also includes language to ensure that FHA maintains its financial stability by permanently authorizing the Secretary to assess higher premiums to higher risk borrowers.
It is important that you contact your elected officials in Congress and tell them that you support downpayment assistance and urge them to support H. R. 6694. To reach your elected officials, please call the US Capitol Switchboard at 202.224.3121.
To learn how you can support it, visit http://www.supporthomeownership.com/ <http://takeaction.supporthomeownership.com/ahaa/issues/alert/?alertid=11521436> .
AmeriDream continues to be your trusted advisor, bringing timely and accurate information when you need it most.
Thank you for your continued support and confidence.
Join The Growing List of DPA Supporters:
* Congressional Leaders
* US Conference of Mayors
* The National Association of Counties
* The National Home Builders Association
* Labor Council for Latin American Advancement
* The National Urban League
* Association for Homeowners Across America
* The 32,000 housing industry professionals, gift recipients and homebuyers who have either written or called Congress to support DPA

Mortgage News

What is happening today in mortgage lending:
This seems to be a change of attitude Freddie Mac wants to give Servicers more time to work with borrowers who are delinquent on their mortgage and they are also willing to pay...

Freddie Mac boosts mortgage servicer incentives
http://www.newsdaily.com/stories/n31314606-freddiemac-servicing/
Big Housing Bill: No Rescues Soon http://www.csmonitor.com/2008/0801/p01s04-usec.html

Do you want to know how your senator voted on Bill 186?
http://www.govtrack.us/congress/vote.xpd?vote=s2008-186

What is happening today in mortgage lending:
Freddie Mac doubles incentives for mortgage servicers
http://www.forbes.com/afxnewslimited/feeds/afx/2008/07/31/afx5275966.html

Big Housing Bill: o rescues soon http://www.csmonitor.com/2008/0801/p01s04-usec.html

VA News

What is happening today in mortgage lending:
VA ISSUES Bulletin: TEMPORARY INCREASE IN MAXIMUM GUARANTY AMOUNT UNDER H.R. 3221
http://www.homeloans.va.gov/circulars/26_08_11.pdf

Mortgage News

What is happening today in mortgage lending:
It's Done, the headlines are starting to appear
Bush Signs Measure for Homeowners, Fannie, Freddie (Update2)
http://www.bloomberg.com/apps/news?pid=20601103&sid=am2yQYThqmxQ&refer=us
Bush Signs Massive Housing Bill
http://blogs.abcnews.com/politicalradar/2008/07/bush-signs-mass.html


Tips For Homeowners On Understanding Sweeping Mortgage Bill
http://www.courant.com/business/hc-mortgage0729.artjul29,0,5538506.story

Mortgage News

What is happening today in mortgage lending: We are definitely moving to new territory:

Banks Act to Aid Mortgage Lending
http://online.wsj.com/article/SB121727042664390535.html?mod=residential_real_estate

Tips For Homeowners On Understanding Sweeping Mortgage Bill
http://www.courant.com/business/hc-mortgage0729.artjul29,0,5538506.story

Mortgage News

What is happening today in mortgage lending:

It was a busy weekend with the Senate working to approve the biggest bill in a decade. I sent out a speical email yesterday giving you the most recent update on this bill. President Bush is expected to sign this some time this week. It wasn't all rosy but it will be interesting to see how it all plays out.

Housing Bill Relies on Banks To Take Loan Losses http://online.wsj.com/article/SB121719179401688061.html?mod=hpp_us_whats_news

Mortgage insurers tightening rules http://www.mercurynews.com/news/ci_10019672

Mortgage News

What is happening today in mortgage lending:
The bill congress just past is expected to be signed by the president in the next few day. Some of the areas I was most interested ended up to be approved by the Senate as:

Bar down-payment assistance for FHA loans. The bill eliminates a program that has allowed sellers to provide down payment assistance

The bill would also increase to 3.5% from 3% the down payment requirement for borrowers getting FHA loans.

Permanently increase "conforming loan" limits. The bill would permanently increase the cap on the size of mortgages guaranteed by Fannie and Freddie to a maximum of $625,500 from $417,000.

The FHA maximum loan limits for high-cost areas would also increase to $625,500. Higher loan limits will make it easier for borrowers to get mortgages, because they're more likely to be traded if they are considered conforming.

Senate passes landmark housing bill http://money.cnn.com/2008/07/26/news/economy/housing_bill_Senate/?postversion=2008072614

How housing rescue bill can help you-CNN

The Senate on Saturday passed a $300 billion housing rescue bill aimed at helping troubled homeowners avoid foreclosure and supporting mortgage giants Fannie Mae and Freddie Mac.
President Bush is likely to sign the bill into law within days. After the law kicks in on Oct. 1, thousands of at-risk borrowers will be able to refinance their unaffordable old mortgages into new low-cost fixed-rate loans insured by the Federal Housing Administration (FHA).
The Congressional Budget Office estimates that 400,000 borrowers with $68 billion in loans may benefit from the program - but the bill allows for as many as 1 million or 2 million borrowers to participate in the program.
Here's what homeowners need to know.
Who's eligible?
Qualified borrowers must live in their homes and have loans that were issued between January 2005 and June 2007. Additionally, they must be spending at least 31% of their gross monthly income on mortgage debt to be eligible for the program.
They can be up to date on their existing mortgage or in default, but either way borrowers must prove that they will not be able to keep paying their existing mortgage - and attest that they are not deliberately defaulting just to obtain lower payments.
Before homeowners can get FHA-backed mortgages, they must first retire any other debt on the home, such as a home equity loan or line of credit. Borrowers are not permitted to take out another home equity loan for at least five years, unless it's to pay for necessary upkeep on the home.
To get a new home equity loan, borrowers will need approval from the FHA, and total debt cannot exceed 95% of the home's appraised value at the time.
How can I apply?
Borrowers can contact their current mortgage servicer or go directly to an FHA-approved lender for help. These lenders can be found on the Web site of the Department of Housing and Urban Development.
How does the refinancing process work?
This is a voluntary program, so lenders holding the original mortgage have to agree to rework a given loan before things can get started. The bill requires lenders to make major concessions, writing down the value of the loan to 90% of the home's current value. In areas where prices have plummeted by as much as 20%, that will mean a substantial loss for the lender.
But lenders won't sign off on a workout unless they think that they'll lose less money on that than they would by allowing a home to go through the costly foreclosure process.
Each loan will have to be underwritten by an FHA lender on a case-by-case basis. That means the banks will do a new appraisal to determine the home's current value, as well as examine and verify income statements, bank accounts, job histories and credit scores.
Based on that new appraised home value, the FHA lender must determine how much the original lender has to reduce the original mortgage, so that it will reflect 90% of the home's market value.
If the original lender agrees to the writedown, the new lender buys the old loan and takes over the reworked mortgage.
As part of the deal, the old lender writes off any fees and penalties on the original mortgage, including prepayment penalties, and accepts the proceeds from the new loan on a paid-in-full basis. Additionally, it pays the FHA an up-front premium equal to 3% of the mortgage principal.
What does it cost?
There should be little up-front costs for borrowers to bear. Loan origination fees will vary by lender, but these can usually be paid by the borrower over the life of the loan in the form of a slightly higher interest rate.
However, the refinanced loans do come with many strings. For one thing, borrowers are responsible for paying an insurance premium to the FHA guaranteeing the loan, which will be 1.5% of the principal annually.
Borrowers also agree to share any profits from future home-price appreciation with the FHA. To do that, they'll pay a "3% exit fee" of the mortgage principal to the FHA when they resell or refinance.
Plus, they'll agree to pay the FHA 100% of any profits they realize from higher home prices if they sell or refinance within a year. So if the original loan principal is $200,000 and the home sells for $250,000, the borrower will owe the FHA $50,000, minus costs.
After a year, borrowers will share 90% of the profits with the FHA. The percentage keeps dropping in 10% increments to 50% after the fifth year, where it stays.
What will I save?
Savings depend on what borrowers are paying for their present loan and where they live, but for most people it will be substantial, even after factoring in the FHA fees.
In areas that have sustained huge price drops, such as Sacramento, Calif., where prices have fallen by about 30% over the past year, some loans might be reduced by more than 40%.
Additionally, the FHA loans carry reasonable interest rates, which are fixed for the life of the loan, as opposed to a subprime adjustable-rate mortgage that can jump higher every six months.

Mortgage News

What is happening today in mortgage lending: This will take a while to digest.
Senate passes housing bill http://www.axcessnews.com/index.php/articles/show/id/16490


Landmark mortgage bill clears Congress
http://www.politico.com/news/stories/0708/12074.html

Mortgage News

House Passes "The Most Important Housing Bill in a Generation"http://originatortimes.com/content/templates/standard.aspx?articleid=3355&zoneid=1

Treasury's Paulson Says it Was Easy to Recommend President Sign Housing Bill
http://www.economicnews.ca/cepnews/wire/article/102001

Mortgage News

DPA's on the chopping block again. Keep the down payment assistance program
http://www.ajc.com/opinion/content/opinion/stories/2008/07/23/mortgaged.html

Helping the Consumer

How many times have you had to explain to your client what a FICO score is and why it is important? This article has some good information that is very consumer friendly.
Credit dos and don’ts before buying a home http://www.dailyprogress.com/cdp/business/real_estate/article/credit_dos_and_donts_before_buying_a_home/25117/

Helping Your Borrower's

Clean up credit score to land a sweet mortgage rate A good article to share with your consumers
http://www.usatoday.com/money/perfi/columnist/block/2008-07-21-home-buyers-credit-report_N.htm

Mortgage News

Freddie Mac May Slow Purchases of Mortgages, Bonds (Update3)Freddie Mac, the second-largest U.S. mortgage-finance company, may cut purchases of home loans from banks and bonds backed by housing debt to shore up its capital amid record delinquencies http://www.bloomberg.com/apps/news?pid=20601103&sid=aqZzF4461u0Q&refer=news

Mortgage News July 15, 2008

Mortgage News
Radian
Rate and Guideline Changes Effective July 14, 2008
Radian’s continued in-depth surveillance and review of mortgage market conditions and
loan performance lead us to conclude that additional changes to our guidelines and pricing
are necessary to address current risk exposure and maintain prudent underwriting practices.
These changes, effective for all mortgage insurance applications received on or after July
14, 2008, will help Radian’s clients provide appropriate and affordable homeownership
solutions for borrowers, while driving high-quality and profitable business. See guidelines go to
http://www.radianmi.com/pdf/Summary_of_July-14_Guideline_Revisions.pdf

Mortgage News

Treasury Acts to Shore Up Fannie Mae and Freddie Mac
http://www.nytimes.com/2008/07/14/washington/14fannie.html?_r=1&th&emc=th&oref=slogin

Government as the Big Lender
http://www.nytimes.com/2008/07/14/washington/14guarantee.html?_r=1&th&emc=th&oref=slogin

Mortgage News

Federal regulators prepare to tighten mortgage rules Los Angeles Times, CA - Jul 9, 2008
On Monday, the Federal Reserve is expected to require lenders to document borrowers' incomes

http://www.latimes.com/news/local/politics/cal/la-fi-housing9-2008jul09,0,1345381.story