Obama- Loan Modification Plan

Is My Loan Eligible for Modification Under the Obama Plan?
by Ralph Roberts

The Treasury Department recently released a report, which include eligibility requirements to determine which homeowners qualify for relief under the plan. Following are the eligibility requirements as specified in the guidelines:

• Mortgage must have originated on or before January 1, 2009.
• Home must be an owner-occupied primary residence (verified with tax return, credit report, and other documentation such as a utility bill) – this program is not designed for investor-owned properties.
• Home must be a single family 1-4 unit property (including condominium, cooperative, and manufactured home affixed to a foundation and treated as real property under state law).
• Home may not be vacant or condemned.
• Borrowers in bankruptcy are not automatically excluded from consideration.
• Borrowers in active litigation regarding the mortgage loan can qualify for a modification without waiving their legal rights.
• First lien loans must have an unpaid principal balance (prior to capitalization of arrearages) equal to or less than:

  • 1 Unit: $729,750
  • 2 Units: $934,200
  • 3 Units: $1,129,250
  • 4 Units: $1,403,400

• Foreclosure actions are suspended during the trial period or while borrowers are considered for alternative foreclosure prevention options. If homeowners fail to qualify, foreclosure proceedings may resume.
• No minimum or maximum LTV ratio for eligibility purposes.
• Loans are eligible for only one loan modification under the program.
• Subordinate liens (such as second mortgages or home equity loans or lines of credit) are not included in the Front-End DTI calculation, but they are included in the Back-End DTI calculation.
• Servicers should follow any existing express contractual restrictions with respect to solicitation of borrowers for modifications.

Applicants will be accepted into the program until December 31, 2012 (the program expiration date), but incentive payments will continue up to five years after the date of entry into the Home Affordable

Modification Program. Monitoring will continue through the life of the program.

Keep in mind that these eligibility requirements are simply government guidelines. Avoid the temptation to qualify or disqualify yourself based solely on what the eligibility requirements indicate. Consult a loan modification specialist who works with lenders on a daily basis to review your situation and determine whether you are likely to qualify. Sometimes the only way to determine whether you qualify is to actually submit your loan modification application.

Survey: AMERICAN DREAM STILL ALIVE!

Survey: American Dream Still Alive
The American dream of homeownership is alive and well with both home owners and potential home owners undeterred by the current housing slowdown.

According to the latest American Dream Survey by Trulia.com, more than 75 percent of Americans surveyed consider owning a home a key part of achieving their personal American Dream.

Creating more jobs and increasing job security is the most important thing President Barack Obama can do to stabilize the housing market, says 53 percent of those surveyed.

Other notable findings:

• 7 percent believe it is important for Obama to keep interest rates low.
• 5 percent think it is important to offer other economic incentives to homeownership.
• 21 percent say it is wise to reduce foreclosures.
• 6 percent believe that there is nothing Obama can do to stabilize the housing market.

Overall, 29 percent of those surveyed believe the housing market will improve in the next year. Of the Republicans surveyed, only 10 percent see improvement in the next year, while 47 percent of Democrats believe in that timetable.

Harris Interactive surveyed more than 1,400 home owners and about 600 renters for the survey.

Source: Trulia.com (03/05/2009)

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Economic Stabilization Bill - Now What?

The immediate impact of the new economic stabilization bill, signed by President George Bush today, will be renewed confidence in the market, two real estate experts said in separate interviews with the editors of REALTOR® Magazine. But don’t expect credit markets to turn around tomorrow. The recovery process will take time, say Kenneth Riggs, head of the commercial real estate analysis firm Real Estate Research Corp. in Chicago and Gary Keller, head of national residential real estate franchisor Keller Williams in Austin, Texas. We asked Keller about the impact of the credit crisis and the stabilization bill on residential real estate, and we asked Riggs for the same analysis from a commercial real estate standpoint.

REALTOR® Magazine: Now that both the House and the Senate have passed the stabilization bill and President Bush is set to sign it, what can we expect the impact to be?

Gary Keller: The market should regain some confidence, and since markets are built mainly on confidence, that’s no small thing. In fact it’s a huge thing and it’s imperative for the market to move forward. But beyond that, we have to wait and see. Although the intent of the legislation is to free up capital for lending on homes, cars, college, and business inventories, the government doesn’t have a mechanism in the bill for making the banks turn around and lend the money back. So no one knows what will actually happen once a bank has its capital freed up.

Kenneth Riggs: Well, it should give calmness to the financial markets by showing that we will in fact work through this crisis. That said, I don’t see the fundamental, or the mechanics, of capital changing right away. That won’t happen until we see how this package will actually operate and how well Treasury can do in buying and then selling the securities. So, the immediate impact would be that the market should at least breathe a sigh of relief. The next step will be to give a foundation for the credit markets to start functioning a little better. We will never get back to the level that we were a year ago; that’s part of the market cleansing itself of a culture in which capital was just too available and too cheap. The bill, too, is raising the FDIC insurance limit for bank deposits to $250,000. Many people will say, “Well, the small person might not have that much.” But it’s really small businesses that are being addressed here, and they’re what run our country. This will allow small companies like a lot of real estate brokerages to start focusing on their business, rather than the credit crunch, and to concentrate on how they can become productive.

Most Secure U.S. Cities

Health, prosperity, safety and security are all desirable aspects when it comes to seeking a place to live, work or raise a family. According to our fourth annual Most Secure U.S. Places to Live rankings from Farmers Insurance Group of Companies®, the city that best meets those qualifications is Corvallis, Ore.

The rankings took into consideration crime statistics, extreme weather, risk of natural disasters, environmental hazards, terrorism threats, air quality, life expectancy and job loss numbers in 379 U.S. municipalities. The study divided the communities into three groups: large metropolitan areas, mid-size cities and small towns.

Corvallis is the fourth different city in four years to earn top honors in the Farmers study. The leading communities in the three previous studies were: the Provo-Orem, Utah, area in 2004; the Richland-Kennewick-Pasco area of southeast Washington in 2005; and St. George, Utah, in 2006.

Top-ranked Corvallis, whose population of 81,105 places it among the small towns, is nestled in the heart of Oregon's Willamette Valley and is home to Oregon State University. In 2006, Corvallis was honored as only the third U.S. city at that time to meet the EPA's challenge to become a Green Power Community. Corvallis' low crime rate and negligible threats of extreme weather, environmental hazards and terrorist threats led to its No. 1 ranking in the 2007 Farmers study.

The San Jose-Sunnyvale-Santa Clara area in northern California's Silicon Valley tops all large metropolitan areas (population of 500,000 or greater), scoring particularly well in the extreme weather and terrorist threats categories. The area is considered one of the leading research and development centers of the world; in 2005, San Jose and Sunnyvale ranked first and second in the number of utility patents filed in the U.S.

Olympia, Wash., is the most secure mid-size city (population between 150,000 and 500,000). The state capital has become a hub for artists and musicians. The extremely clean air and the long life expectancy of Olympia's residents aided its lofty ranking.

Large Metro Areas (500,000 or more residents)

1. San Jose-Sunnyvale-Santa Clara, Calif.

2. Boise City-Nampa, Idaho

3. Bethesda-Gaithersburg-Frederick, Md.

4. San Francisco-San Mateo-Redwood City, Calif.

5. Oxnard-Thousand Oaks-¬Ventura, Calif.

6. Bridgeport-Stamford-Norwalk, Conn.

7. Nassau County-Suffolk County, N.Y.

8. New Haven-Milford, Conn.

9. Lake County, Ill./Kenosha County, Wis.

10. Honolulu, Hawaii

11. Portland-South Portland-Biddeford, Maine

12. Cambridge-Newton-Framingham, Mass.

13. Edison, N.J.

14. Portland-Beaverton, Ore./Vancouver, Wash.

15. Santa Ana-Anaheim, Calif.

16. Madison, Wis.

17. Seattle-Bellevue-Everett, Wash.

18. Rochester, N.Y.

19. Syracuse, N.Y.

20. Essex County, Mass.

Mortgage Applications Surge

Mortgage Applications Surge

Mortgage applications rose 33.4 percent last week on a seasonally adjusted basis, rising to 661.7 from 496.2 the previous week, according to the Mortgage Bankers Association weekly survey of mortgage activity. Total applications reached their highest level since early May.

On an unadjusted basis, the index rose 65.3 percent compared with the previous week, which was shortened by Labor Day. It was down 1.3 percent compared with the same week a year ago.

Refinances fueled the increase. The Refinance Index increased 88.1 percent while the seasonally adjusted Purchase Index increased only 2.4 percent. The refinance share of mortgage activity increased to 51.6 percent of total applications from 36.3 the previous week.

“Renewed financial concerns should keep long-term Treasury yields low and translate to lower mortgage rates in the near term, despite some widening in mortgage spreads,” says Orawin Velz, MBA’s Associate Vice President of Economic Forecasting in a statement. “We expect to see meaningful increases in mortgage demand in coming weeks on both the purchase and refi sides.”

Mortgage rates fell for the week:

• 30-year fixed-rate mortgages decreased to 5.82 percent from 6.06 percent.
• 15-year fixed-rate mortgages decreased to 5.54 percent from 5.73 percent.
• 1-year ARMs decreased to 6.95 percent from 7.00 percent.

Why This Autumn is a Great Time to Buy

This fall could be a particularly great time for first-time or buyers long out of the market to jump in, say a variety of real estate professionals.Here are the reasons why:

Prices are probably as low as they are going to go as the market stabilizes, thanks to the government takeover of Freddie Mac and Fannie Mae.

Interest rates are likely to decline as Freddie and Fannie get government help.
The Federal Housing Administration recently boosted its loan limits to $729,750 in expensive areas. It's going to take some of that back come Jan. 1, when the loan limit will shrink to $625,500.
The FHA allows down payments of as little as 3 percent, but that will rise to 3.5 percent as of Oct. 1. People scraping dollars together for a down payment should try to set their closing for the end of this month.
The tax credit will shave $7,500 off a first-time buyer’s federal tax bill due April 15.
Buyers who don't owe tax, will get the money as a refund.
The government's definition of a first-time buyer is anyone who hasn’t owned a home in the last three years.