Bloomberg Reports Home Prices Likely to Rise

In a post today from CNN’s “State of the Union” interview with HUD Secretary Shaun Donovan, Bloomberg reports that house prices are unlikely to decline further, and they expect to see a rise in prices in the third quarter.

This is due to the reduction in number of people defaulting on their mortgages, down 40% over the same time last year.

Also, in general, across the U.S., home sales have risen over the past six months. See more details in the Bloomberg article and the CNN interview with Secretary Donovan.

Secretary Donovan said according to the CNN interview,

“Foreclosures are coming down. They’re down about 40 percent since last year,” said Donovan, who joined President Barack Obama’s Cabinet in 2009. “So, we are making progress, but rightly, the American people recognize we’re not where we need to be. We still have a ways to go.”

According to the Bloomberg article,

“Contracts to buy previously owned U.S. homes rose 8.2 percent in May, following a revised 11 percent drop in the previous month, the National Association of Realtors said on June 29. A separate report by the Chicago-based group on June 21 showed sales of existing houses, which make up about 96 percent of the market, declined in May to a six-month low.”

I will be curious to see the Towson real estate market update from June, because here in our area, we did not see increases, like the NAR’s statistics from May.

Contact me for details on your Towson house value, because each neighborhood is retaining or losing value separately.

Maryland to Receive $6.8M to Help Stop Foreclosures

The US Housing and Development has awarded Maryland $6.8 Million to help stop foreclosures as part of the Neighborhood Stabilization Program.

Areas receiving awards are allowed to use the money to buy land and property to either rehabilitate or knock down houses, and also to offer downpayment and closing cost assistance programs to low-to-moderate income homebuyers in the areas.

The Baltimore Business Journal reports that $1.8 Million is directed to Price George’s County, while the rest of Maryland will receive $5 Million.

I am hoping that a large portion will be directed to Baltimore homebuyers, where foreclosures have risen so highly, and neighborhood values hurt in many places.

The focus from HUD is that

“These grants will support local efforts to reverse the effects these foreclosed properties have on their surrounding neighborhoods,” said HUD Secretary Shaun Donovan, in a press release. “We want to make certain that we target these funds to those places with especially high foreclosure activity so we can help turn the tide in our battle against abandonment and blight.”

Does HUD Owe You a Refund?

Does HUD owe you a refund?

If you had an FHA-insured mortgage after September 1, 1983 and meet certain qualifications (including no refinance), then possibly!

Here are the eligibility requirements from their website:

Who may be eligible for an FHA refund or share?

Premium Refund: You may be eligible for a refund of a portion of the insurance premium if you:

-               acquired your loan after September 1, 1983

-               paid an up-front mortgage insurance premium at closing and

-               did not default on your mortgage payments.

Review your settlement papers or check with your mortgage company to determine if you paid an up-front premium.

Distributive Share: You may be eligible for a share of any excess earnings from the Mutual Mortgage Insurance Fund if you:

-               originated your loan before September 1, 1983

-               paid on your loan for more than seven years and

-               had your FHA insurance terminated before November 5, 1990.

Now, there are many things that could disqualify you, such as if your mortgage had been assumed by a new buyer, you refinanced that FHA loan because the new mortgage would have included that credit, if a claim had been made by your mortgage company against the FHA insurance, and if your shares remained unclaimed for over six years from the date of the notification sent to your last known address.

How much of a refund you may be due would be determined by the FHA Commissioner.

To see if you are owed a refund from HUD, search the database. You only need your last name, and then it is broken out by state.

If you are owed money, then go through the steps laid out on the site, and please let me know. I am curious to see how many people may have found money owed to them by HUD!

FHA Refinance of Underwater Borrowers

FHA is offering refinances for qualifying underwater borrowers, according to a mortgagee letter sent out by HUD last week.

Mortgagee Letter 2010 -23 came as a result of the changes announced by HUD in March 2010 in the MHA (Making Housing Affordable) FHA program.

The letter states that the focus of the program is:

These enhancements are designed to maintain homeownership by providing borrowers, who owe more on their mortgage than the value of their home, opportunities to refinance into an affordable FHA loan. This opportunity allows borrowers who are current on their mortgage to qualify for an FHA refinance loan provided that the lender or investor writes off the unpaid principal balance of the original first lien mortgage by at least 10 percent.

Hopefully this will help a large number of people who do not want to leave their homes and can possibly make smaller payments per month to remain.

The refinances must have their case numbers assigned after September 7, 2010, and all of these qualifying loans must close by December 31, 2012.

The mortgagee letter is more than five pages long, and there are many details and eligibility requirements.

Participation is voluntary and requires the consent of lien holders. In order for a loan to be eligible, the following conditions must be met:
1.    The homeowner must be in a negative equity position;

2.    The homeowner must be current on the existing mortgage to be refinanced;

3.    The homeowner must occupy the subject property (1-4 units) as their primary residence;

4.    The homeowner must qualify for the new loan under standard FHA underwriting requirements and possess a “FICO based” decision credit score greater than or equal to 500;

5.    The existing loan to be refinanced must not be a FHA-insured loan;

6.    The existing first lien holder must write off at least 10 percent of the unpaid principal balance;

7.    The refinanced FHA-insured first mortgage must have a loan-to-value ratio of no more than 97.75 percent;

8.    Non-extinguished existing subordinate mortgages must be re-subordinated and the new loan may not have a combined loan-to-value ratio greater than 115 percent;

9.    For loans that receive a “refer” risk classification from TOTAL Mortgage Scorecard (TOTAL) and/or are manually underwritten, the homeowner’s total monthly mortgage payment, including the first and any subordinate mortgage(s), cannot be greater than 31 percent of gross monthly income and total debt, including all recurring debts, cannot be greater than 50 percent of gross monthly income;

10. FHA mortgagees are not permitted to use premium pricing to pay off existing debt obligations to qualify the borrower for the new loan;

11. FHA mortgagees are not permitted to make mortgage payments on behalf of the borrowers or otherwise bring the existing loan current to make it eligible for FHA insurance; and

12. The existing loan to be refinanced may not have been brought current by the existing first lien holder, except through an acceptable permanent loan modification as described below.

Baltimore underwater homeowners should find out if they are eligible by a Baltimore mortgage professional. If this option is not open to you, and you still want to avoid foreclosure in Baltimore, contact me to help you. There may be other options open to you.

HUD to Investigate Possible Loan Denials to Pregnant Borrowers

News came out yesterday in a New York Times report that there were loan denials to people because of the fact that one member of the family was expecting a baby, and now HUD is going to investigate the possible loan denials to pregnant borrowers.

Shaun Donovan, of HUD, stated to the New York Times:

“Lenders have every right to ascertain the incomes of families to determine whether they are eligible for a mortgage loan, but they have no right to use a pregnancy or a short-term disability as a cause to deny that family a mortgage they would otherwise qualify for,” Shaun Donovan, the agency’s secretary, said in a statement late Wednesday.

This was very upsetting to many who felt this was an illegal and unfair practice. The question I, as well as many, had, is whether this violated the Fair Housing Act.

I am hoping that these practices do not continue, or that they are found to be untrue allegations.

Towson First Time Homebuyers — $8000 Tax Credit Cannot Be Used for 3.5% Downpayment

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I am sure everyone heard about another change to the $8000 tax credit policy. On Friday, HUD Secretary Shaun Donovan announced a policy change that would provide buyers with quicker access to the tax credit. The credit will be issued in advance in the form of a short term loan to the buyer. The buyer will have to be pay the loan back when the buyer receives their tax credit. This new policy only applies to FHA loans.

Here’s the kicker: The short term loan CANNOT GO TOWARDS THE 3.5% DOWN PAYMENT!!! The Government still wants the buyer to “have some skin in the game”.

In my opinion, buyers should opt to have the closing costs paid by the seller, just like 90% of the transactions out there, and keep the $8000 for themselves when they file their taxes.Here is the letter from HUD to approved mortgage lenders, of which, we at Atlantic Home Equity, are. 09-ml-1520using20first-time20homebuyer20tax20credits1

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So, what does this mean for the Towson First Time Homebuyer? You still need money for a downpayment, and can possibly ask for seller closing cost help.

The details coming from HUD & FHA have been very confusing, as I have written about before.

If you would like further information, please don’t hesitate to contact either Tasha or myself. We understand the ins & outs of the homebuying process, and can help walk you through the steps!

$8,000 Tax Credit Can Be Used for Downpayment for Baltimore Homebuyers

**Update May 14, 2009, please see my update that HUD has retracted its statement and that this may NOT be the case everywhere.**

The Secretary of the U.S. Department of Housing and Urban Development announced at the National Association of Realtors summit today that the FHA is going to allow lenders to let First Time Homebuyers use the $8000 tax credit currently in place as a downpayment rather than having to wait until they file their tax returns.

Secretary Donovan stated: “We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a downpayment.”

On the heels of the Fannie Mae & Freddie Mac 105% Refinance Plus Program announced last month, this is a great indication of how the Obama Administration is working hard to stabilize the housing market and the economy in general.

More details will be forthcoming, and until then, the details can be found here.

So, what are you waiting for, Baltimore Homebuyers? THE TIME TO BUY IS NOW! Don’t miss your chance!