(May 10, 2010) Closing Cost Assistance Extended for Fannie-Mae-Owned Homes
Fannie Mae has extended its 3.5 percent incentive for buyers who close on Fannie-Mae-owned homes listed on www.HomePath.com by June 30, 2010. The incentive of up to 3.5 percent of the sales price may be used for (1) closing costs, (2) the purchase of a new Whirlpool® appliance, or (3) a combination. The program is for owner-occupants (including first and second homes), not investors. More from The Washington Report . . .
(May 10, 2010) Fannie Tightens Underwriting for Certain Types of Mortgages
On April 30, 2010, Fannie Mae released Announcement SEL-2010-06 to tighten underwriting for certain types of mortgages. To further limit payment shock for a borrower with an adjustable rate mortgage (ARM) that adjusts during the first five years of the loan, borrowers must be qualified at the higher of the note rate plus 2%, or the fully indexed rate. Interest-only mortgages are being restricted so they remain as a financial management tool, but are not available to make a mortgage affordable. Interest-only mortgages will no longer be available for cash-out refinances, Flexible mortgages, MyCommunityMortgage® loans, investment properties, or two- to four-unit properties. The minimum credit score for an interest-only mortgage is now 720, and the borrower must have reserves covering at least two years. In addition, the seven-year balloon mortgage will no longer be a standard Fannie Mae product. More from The Washington Report . . .
(May 10, 2010) Fannie Mae Changes Rules for Borrowers with a Prior Short Sale or Deed-in-Lieu of Foreclosure
On April 14, 2010, Fannie Mae released Announcement SEL-2010-05 revising its rules regarding the eligibility of a borrower to obtain a new mortgage after a preforeclosure event (a short sale (also known as a preforeclosure sale) or a deed-in-lieu of foreclosure). Fannie Mae has changed the waiting period for these borrowers, and added variations depending on the loan-to-value ratio (LTV) and whether there are extenuating circumstances. For a consumer with a prior short sale or a deed-in-lieu of foreclosure without an extenuating circumstance, the new waiting periods are 2 years with a 80% maximum LTV, 4 years with a 90% maximum LTV, and 7 years otherwise. If there are extenuating circumstances, the new waiting period is 2 years with a 90% maximum LTV ratio. Fannie is also tightening the requirements for re-establishing credit. In addition to the waiting periods, the loan must meet delegated underwriting and minimum credit score requirements, and the borrower must have traditional credit. Nontraditional credit or "thin files" are not acceptable. More from The Washington Report . . .
(May 10, 2010) House Approves Home Star Energy Rebates
The House of Representatives passed H.R. 5019: the Home Star Energy Rebate Act, sending the bill to the Senate for its consideration. The bill would establish the voluntary "Home Star" energy efficiency program to offer financial incentives including rebates to homeowners who choose to make energy-related home improvements. NAR successfully worked with members of Congress to add a strict prohibition on the use of the program as a de facto means of enacting energy labeling and will work to add these provisions in the Senate version of the legislation, S. 3177, which at this time, has been referred without further action to the Finance Committee. More from The Washington Report . . .
(May 7, 2010) Fannie and Freddie Failure Forever
Earlier in the week Sen. Chris Dodd (D-Conn.) told reporters about his financial regulation bill, "We've ended the 'too big to fail' debate. So no longer do I expect any argument to be made that this bill exposes the American taxpayer."
Sen. Dodd's statements are inaccurate, says the Heritage Foundation:
- Freddie Mac announced this week that it lost another $6.7 billion in the first quarter of 2010 and therefore needed another $10.6 billion in cash from U.S. taxpayers.
- Since formally nationalizing Freddie in 2008, the federal government has already spent $50.7 billion bringing the Freddie bailout total to $61.3 billion so far.
- Combined with Fannie Mae's raid on the Treasury, the Congressional Budget Office estimates that the American people will spend $389 billion bailing out the two government sponsored entities by 2019.
So much for American taxpayers no longer being exposed to "too big to fail," says Heritage. In fact, nothing in the Dodd bill does anything to reform Fannie Mae and Freddie Mac. This despite the fact that Fannie and Freddie were key components in causing the very financial crises Dodd claims his bill will forever prevent. More from National Center for Policy Analysis . . .
(May 3, 2010) House Committee Approves Property and Flood Insurance Bills
On April 27, 2010, the House Committee on Financial Services approved several property insurance reform bills which will now move to the floor of the full House of Representatives for consideration. More from The Washington Report. . .
(May 3, 2010) Rural Housing Funds Exhausted in Early May - Congress is Working on a Fix
Last week the US Department of Agriculture (USDA) Rural Development announced that the Single Family Housing Guaranteed Loan Program will likely be exhausted by May 7, 2010. Previously, USDA believed the program would be exhausted by April 30, 2010. Depending on Congressional activity, the Agency may consider issuing conditional commitments.
Recently, the House of Representatives passed HR 5017, the "Rural Housing Preservation and Stabilization Act of 2010", sponsored by Reps. Kanjorski (D-PA) and Capito (R-WV). The bill allows the Secretary of Agriculture to increase the upfront premium for 502 single-family loan guarantees up to 4 percent in order to make the program self-sufficient. This fee may be rolled into the loan. The fee increase was necessary because the program has exhausted all funding. On April 27, 2010, Senator Bennet introduced S 3266, the companion bill to HR 5017. The bill was referred to the Senate Committee on Banking, Housing, and Urban Affairs. More from The Washington Report . . .
(May 3, 2010) House Committee Passes FHA Reform Bill
The House Financial Services Committee favorably reported H.R. 5072, the "FHA Reform Act of 2010." This bill, sponsored by Reps. Waters (D-CA) and Capito (R-WV), will complete several changes FHA needs to insure the solvency of the mutual insurance fund. In October, HUD released an audit that showed their capital reserves had fallen below the Congressionally-mandated level of 2%. In response, FHA announced a number of changes to the program to strengthen its financial position. This bill includes authority for FHA to increase the annual premium. To date, FHA has increased the up-front premium, because they lacked authority to increase the annual. Once this law has passed, FHA plans to reduce the up-front premium and raise the annual instead. In addition, the bill includes a number of lender enforcement provisions. More from The Washington Report . . .
(April 26, 2010) House Committee Passes Energy Efficient Incentives Program
On April 22, 2010, The House Financial Services Committee passed H.R. 2336, the "Green Act of 2009", sponsored by Reps. Perlmutter (D-CO) and Biggert (R-IL). This bill creates voluntary incentives for energy efficient improvements in federally assisted housing. NAR worked with the bill's sponsors to ensure the provisions did not apply to FHA or Fannie Mae or Freddie Mac mortgage programs. The bill is limited to HUD and RHS federally assisted housing programs. The bill passed the Committee by voice vote. More from The Washington Report . . .
(April 26, 2010) Congress Working on Restoring Rural Housing Funding
Last week the House Financial Services Committee passed H.R. 5017, the "Rural Housing Preservation and Stabilization Act of 2010", sponsored by Reps. Kanjorski (D-PA) and Capito (R-WV). The bill will allow the Secretary of Agriculture to increase the upfront premium for 502 single-family loan guarantees up to 4%, in order to make the program self-sufficient. This fee may be rolled into the loan. The fee increase was necessary because the program has exhausted all funding. The bill is expected on the House Floor early next week. More from The Washington Report . . .
(April 26, 2010) House Committee Considers Bill to Strengthen FHA
The House Financial Services Committee began consideration of H.R. 5072, the "FHA Reform Act of 2010." This bill, sponsored by Reps. Waters (D-CA) and Capito (R-WV), will complete several changes FHA needs to insure the solvency of the mutual insurance fund. In October, HUD released an audit that showed their capital reserves had fallen below the Congressionally-mandated level of 2%. In response, FHA announced a number of changes to the program to strengthen its financial position. This bill includes authority for FHA to increase the annual premium. To date, FHA has increased the up-front premium, because they lacked authority to increase the annual. Once this law has passed, FHA plans to reduce the up-front premium and raise the annual instead. In addition, the bill includes a number of lender enforcement provisions. More from The Washington Report . . .
(April 19, 2010) Flood Insurance Update
On April 15, 2010 Congress passed, and President Obama signed, legislation to renew the National Flood Insurance Program (NFIP) through May 31, 2010. Congress allowed the NFIP to expire on March 28, 2010. By law, flood insurance is required for the purchase of real estate in a 100-year floodplain. The lapse in flood insurance resulted in many delayed, and even cancelled, transactions. More from The Washington Report . . .
(April 12, 2010) Overtaxed Homeowners Start to Fight Back
Now that the housing bubble has burst, up to 60 percent of the nation's taxable property may be over assessed, meaning their owners are paying thousands of dollars more in taxes than they need to. That is leading to a flood of appeals in many markets from homeowners eager to cut their taxes and speed the process of aligning tax valuations with reality, says MSNBC.
While home prices have fallen by 30 percent on average since their 2007 peak, according to the Case-Shiller Home Price Index, many counties only reassess every three to five years and have little incentive to move faster considering how important property taxes are to funding local government operations, says MSNBC. More from National Center for Policy Analysis . . .
(April 12, 2010) Facts about the "Homeowners - Listen Up" Email
An email (subject: "Homeowners-Listen Up") is being re-circulated claiming that H.R. 2454: the American Clean Energy & Security Act would require an energy license/retrofits for home sale. The email is NOT accurate. H.R. 2454 remains pending in the Senate. Senators Kerry (D-MA), Graham (R-SC) and Lieberman (I-CT) continue to pursue bipartisan support for an alternative to the House bill to move the legislation forward for consideration by the Senate. More from The Washington Report . . .
(April 12, 2010) FHA Announces Appraisal Updates
The Federal Housing Administration (FHA) released Mortgagee Letter 2010-13 Appraisal Update and/or Completion Report providing additional guidance to ML 2009-51. ML 2010-13 discusses two prohibitions on the use of an appraisal report, the Market Conditions Form, and permissible validity periods. More from The Washington Report . . .
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