The mortgage industry has underwent some dramatic changes in the past year as has the regulations and rules the industry must comply with. Lender’s are barely able to keep up with everything new so it’s not surprising home-buyers have many questions when it comes to obtaining a mortgage to buy a home. Therefore, I thought I would take this opportunity to provide a list of questions that a home-buyer should ask their lender that I think will be helpful. Oh, and since I am a loan officer in St. Louis, I did take the liberty of giving my Continue Reading →
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Dennis Norman Last month I wrote about a new policy implemented by Fannie Mae that would “lock-out” borrowers from getting a Fannie-Mae insured loan for 7 years if they did a “strategic default” or otherwise did not act in good faith and were foreclosed upon. In a nut shell, the borrower that Fannie Mae is targeting here is the borrower that has the financial ability to make their payments, accept a loan modification or other “work-out” from Fannie Mae but instead chooses just to walk away from their home and letting the lender foreclose. In addition to locking Continue Reading → Dennis Norman For way too long I’ve been writing about record, or near- record, levels of foreclosures and mortgage delinquencies. My ongoing concern about this, in terms of the housing market, is that I just don’t see how we are going to have a sustainable recovery of the housing market while we have 1 in 8 homeowners with a mortgage in the U.S. currently either delinquent on their mortgage or in some stage of the foreclosure process. Lately there has appeared to be some leveling off of mortgage delinquencies and foreclosure growth is at a slowing rate, both Continue Reading → After a close brush with a deadline that could have impacted tens of thousands of home buyers, Congress passed an extension of the Home buyer Tax Credit closing deadline. The extension is included in the Home Buyer Assistance and Improvement Act and will prevent as many as 180,000 home buyers from losing their eligibility for the tax credit. These borrowers had home purchase contracts pending as of April 30 and had until June 30 to close on their purchases to claim the federal tax credit; with this extension, these households now have until September 30 to close and still Continue Reading → Dennis Norman Homeowners’ mortgage delinquency rates increased in May 2.3 percent from April rising to 9.2 percent of all mortgages being delinquent. This information comes from a report issued by LPS Applied Analytics, one of the largest mortgage servicers in the U.S. According to the report there are, as of May 31, 2010, 7.3 million home mortgages currently in some stage of delinquency. After seeing a couple of months of improvement there was a turn for the worse in May of the “deterioration ratio”, the reltionship between the number of loans going to a “worse” status for every Continue Reading → Dennis Norman While there has been much discussion about the causes and effects of the Housing Boom as well as the Bust (including by yours truly in prior posts) I don’t think we need to refrain from continuing to examine this part of history that is affecting millions of people across the country. Perhaps we can learn some lessons from this that will help us avoid another such collapse of the housing market in the future. My topic today actually has a silver lining of sorts. The topic is debt and how so many homeowners across the country Continue Reading → The state of Missouri funded a $15 million tax credit incentive program in January of this year to help spur home sales, but few have taken advantage of the program. Now, Missouri home buyers must complete the purchase of their home by August 31, 2010 to take advantage of the program. The Missouri Housing Development Commission (MHDC) must receive their HOPE application by September 30, 2010. HOPE stands for Home Ownership Purchase Enhancement. Homes purchased after August 31, 2010 will not be eligible for the HOPE program. The HOPE program was expected to pay the property taxes for 9,000 Continue Reading → Dennis Norman According to a report issued by Radar Logic Incorporated government-sponsored enterprises (GSEs) and Federal agencies involved in housing finance currently have an inventory of over 200,000 repossessed homes. Being the largest owner of foreclosed homes in the U.S. gives the government a lot of power and influence over the housing market for years to come as they will generate significant pressure on home prices as they sell off foreclosed homes in the coming years. Foreclosed homes currently sell at significant discounts to the unpaid balances of the mortgages they back, generating a loss for the seller Continue Reading → Dennis Norman I spent this morning reading a sobering and, quite frankly depressing, report issued by the Center for Responsible Lending that focused on the demographics of people losing their homes as a result of foreclosure. The report is done well and looks at the impact of foreclosures on different races and ethnicity’s and then addresses what they believe to be the cause of this crisis. While the reports main subject was eye opening, what really got my attention as I went through the report were some of the facts and figures being quoted. This caused me to Continue Reading → Dennis Norman So, you have the money to pay on your ‘underwater’ mortgage, or to afford the reduced payment amount offered to you under the HAMP program, but think, rather than throw good money after bad you’ll just do like so many borrowers are doing and ‘walk-away‘? Well, if you have any plans to buy a house again in, say the next seven years, particularly with a Fannie Mae loan, think again. Today Fannie Mae announced policy changes to “encourage borrowers to work with their servicers”. These policy changes include, a seven-year “lock-out” period for borrowers that Continue Reading → Fannie Mae and Freddie Mac have become two of the nation’s largest landlords. Both institutions took over a foreclosed home roughly every 90 seconds during the first three months of the year. As of the end of March, they owned over 160,000 houses. The inventory of Fannie and Freddie continue to increase, but their inventory is only a portion of the total foreclosures. The worst loans were made outside of Fannie and Freddie by banks, thrifts or other private label institutions. Most foreclosures are heavily concentrated in a few key states: Florida, Arizona, Nevada, California and Michigan. With unemployment hovering Continue Reading → Dennis Norman May and June Sales Expected to Remain Elevated as Buyers Rush to Close By June 30th Deadline for Tax Credits. The deadline to buy a home and qualify for the home-buyer tax credit was April 30th so it’s not surprising we saw pending home-sales increase dramatically in March and April as buyers rushed to get “under-contract” before the April 30th deadline. For those home-buyers that were lucky enough to qualify for the home-buyer tax credit they have, unless Congress extends the deadline, until June 30, 2010 to close on the purchase of their home. Therefore, as I Continue Reading → Dennis Norman UPDATE June 21, 2010- I said I would update this post after the proposed rules were published on the Federal Register with info on how to submit a comment -If you would like to comment, see the comment instructions in the Federal Register (I highlighted them) by clicking here -end of update. June 4, 2010 Are they really going to repeat the same mistakes that helped cause this housing recession? I say this because of a release I received from the Federal Housing Finance Agency (FHFA) last week announcing that the FHFA “has sent to the Continue Reading → Dennis Norman According to a press release issued by the FBI, nearly 500 people have been arrested in a nationwide mortgage fraud take-down as part of “Operation Stolen Dreams.” This operation was launched on March 1, 2010 and, according to the FBI, has lead to a total of 485 arrests, 330 convictions and the recovery of nearly $11 million. The FBI estimates that losses from a variety of fraud schemes are estimated to exceed $2 billion. Operation Stolen Dreams is the government’s largest mortgage fraud take-down to date. But FBI Director Robert S. Mueller cautioned that there is Continue Reading → Fannie Mae and Freddie Mac notified the New York Stock Exchange (NYSE) of its intent to delist its common and preferred stock. The Federal Housing Finance Agency (FHFA), the conservator for Fannie and Freddie, has directed the companies to delist their common stock and their preferred stock from the NYSE. “FHFA’s determination to direct each company to delist does not constitute any reflection on either Enterprise’s current performance or future direction, nor does delisting imply any other findings or determination on the part of FHFA as regulator or conservator,” FHFA Acting Director Edward J. DeMarco said in a press release. The U.S. Census Bureau and US Department of Housing and Urban Development (HUD) issued a their report on New Residential Construction for May 2010 showing a decrease in building permits and a decrease in new home starts from April. The report shows the following: Building permits issued for single-family residences in May were at an annual rate of 438,000 which is 9.9 percent below the revised April rate of 486,000 and an increase of 3.1 percent from a year ago when the rate was 425,000. Housing starts for single-family residences in May were at an annual rate of 468,000 Continue Reading → Dennis Norman Will the Bears or Bulls prevail in 2010? As the real estate market is beginning to show signs that we are “bottoming out” and that the down-slide is leveling off the discussion has become what the rest of 2010 holds in store. Some say we are entering a Bull market and expect prices to increase from the depressed levels they have reached citing the greatly increased affordability of homes and record low interest rates; others say we are entering a Bear market and that over-supply in the market, largely a result of record foreclosures, will Continue Reading → Dennis Norman The good news is, foreclosure activity for the U.S. in May decreased by 3 percent according to a report released by RealtyTrac. The bad news is, May marked the 15 th consecutive month where the overall foreclosure activity has surpassed 300,000 actions; that’s about 4 million foreclosures in the past 15 months. For May there were foreclosure filings reported on 322,920 properties in the U.S., a 3 percent decrease from April but a 1 percent increase from May 2009. One in every 400 U.S. housing units received a foreclosure filing during the month of Continue Reading → Bank of America has agreed to pay $108 million to about 200,000 homeowners who paid improper and inflated charges to the defunct subprime mortgage lender that became the poster child of the housing apocalypse, Countrywide Financial. The Federal Trade Commission said two mortgage-servicing units of Countrywide, which BofA acquired in 2008, “deceived homeowners who were behind on their mortgage payments into paying inflated fees — fees that could add up to hundreds or even thousands of dollars.” With continuing worries about about Europe’s debt crisis and the stock market, “flight to quality” should keep dollar denominated assets in favor Continue Reading → Dennis Norman According to data from NeighborWorks America, a national nonprofit organization created by Congress to provide community-based revitalization efforts, every 13 seconds in America, there is another foreclosure filing. This means there are more than 6,600 home foreclosure filings per day and currently, more than 4.5 million households are at risk of foreclosure. Unfortunately there is no end in site as industry experts are predicting 1.5 – 2.0 million new foreclosures in 2010 and as many as a total of 8.1 million by 2012. This many people in financial distress provides great opportunity for loan modification scam Continue Reading → Dennis Norman A report released by CoreLogic showed the St. Louis metro area to have a foreclosure rate in April of 1.49 percent up slightly from March’s revised rate of 1.45 percent and an increase of 34.2 percent from the year prior when the rate was 1.11 percent. The national foreclosure rate for April remains over twice the rate of St. Louis at 3.20 percent and was an increase of 30.1 percent from a year ago when the national foreclosure rate was 2.46 percent. For the State of Missouri the April foreclosure rate was 1.33 percent, a 30.4 Continue Reading → Dennis Norman Today the National Association of REALTORS released it’s Pending Home Sales Index for April showing an increase of 6.0 percent in the index from March (seasonally adjusted) and a whopping 22.4 percent increase from April 2009. This comes on the heels of a 5.3 percent increase in March and an 8.3 percent increase in February. If these were pure “market-driven” sales this would be extremely exciting news and point toward a recovery in the real estate market. Unfortunately, everything I see points to this being driven primarily, if not purely, by the April 30th deadline to Continue Reading → After the problems we have seen over the past couple of years in the real estate, mortgage and banking industries it is not surprising we have seen massive legislative changes brought about which make it more challenging for a home-buyer to obtain a mortgage. Some of the changes borrowers will see when they attempt to obtain a mortgage to buy a home or refinance their existing mortgage include: Documentation – Did you like that “no-doc” loan you did last time around? Forget it! This time around you may be asked to provide, in addition to items that have been Continue Reading → UPDATE- June 2, 2010: The National Association of REALTORS obtained answers from the Treasury Department on 3 common questions about HAFA: agents are not permitted to rebate a portion of their commission to the buyer, sellers who are real estate agents must list their home for sale with another broker, not their own broker, and the incentive allowed for subordinate lien holders (6% of any one subordinate lien, up to a total of $6,000 for all subordinate liens) is a hard cap and may not be supplemented from any source. Dennis Norman In March I did an update on Continue Reading → Dennis Norman Earlier this month I did a post about important legislation in Missouri, specifically HB 2058, which would make badly needed changes to the Missouri Mechanic’s Lien Statute, because if it didn’t pass purchasers of new homes would face hurdles obtaining long-term fixed-rate mortgages as title companies have threatened to stop providing mechanic’s lien coverage. On May 17th I was happy to update the post with the news that the bill had passed the House and Senate and was just awaiting the signature of Governor Nixon to become effective. Herein the problem lies… Word is Governor Nixon Continue Reading → The National Flood Insurance Program, known as the NFIP, lapsed March 28 this year and left many pending home sales in limbo. Congress and President Barack Obama temporarily reinstated the program 18 days later on April 16 as part of a bill that also extended unemployment benefits and Medicare reimbursement for doctors. However, the temporary extension of the NFIP legislation will expire again on May 31. The stage has now been set for another lapse in funding for the program just weeks before the mandatory June 30 closing deadline for buyers attempting to satisfy the requirements of the federal Continue Reading → Dennis Norman The U.S. Department of Commerce released a report showing the sale of New Homes in April were at a seasonally adjusted annual rate of 504,000, a 14.8 percent increase from the revised March rate of 439,000 and is 47.8 percent above a year ago. The inventory of new homes (seasonally adjusted) at the end of April is just 5.0 months a huge decline from just two months ago when it was 9.2 months. My Mantra As has been my long-running mantra, I don’t like “seasonally adjusted” numbers and “rate” of sales (nor does Standard & Poors, Continue Reading → Dennis Norman Sales increased for second consecutive month- With the home-buyer tax credits ending April 30th, it’s not surprising that we saw an increase of home sales in March, and now in April, as buyers rushed to buy before the deadline to have a congract of April 30, 2010. According to the latest report from the National Association of REALTORS(R), existing home sales in the US in April increased 7.6 percent to a seasonally adjusted-annual rate of 5.77 million units in April from a revised level of 5.36 million units in March, and increased 22.8 percent from a year Continue Reading → A 10-count indictment has been unsealed charging six individuals with conspiracy to commit wire fraud and wire fraud, announced U.S. Attorney Karen P. Hewitt. The defendants are charged with submitting false and fraudulent mortgage loan applications and related documents to banks and other lending institutions, thereby inducing the institutions to make approximately 36 loans totaling approximately $20,800,000. The defendants charged with participating in the conspiracy are: Brian Andrew La Porte; Daniel John Schuetz; Michael Wayne Wickware; Roxanne Yvette Hempstead; Darryl Anthony Wallace, aka Darryl Anthony White; and Terrence Smith, aka Terry Lee Smith. The indictment alleges that the defendants devised Continue Reading → The founder and head of Chicago Development and Planning was sentenced yesterday to 15 years and eight months in prison, and ordered to pay more than $9 million in restitution for wire fraud, mail fraud, and money laundering, U.S. Attorney Joseph P. Russoniello announced. Patricia Morgen pleaded guilty on Dec. 16, 2009. According to the plea agreement, she admitted creating a scheme to solicit investors for a company called Chicago Development and Planning, with the promise of substantial guaranteed return profit payments. Morgen falsely promised investors that their funds would be used to purchase real property to be rented or Continue Reading → |
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