No Changes for "Jumbo" Loan Limits

The Federal Housing Finance Agency (FHFA) recently announced that there will be no changes for the maximum conventional loan limits in 2013. This is referring to base and high-cost or "jumbo" conforming loans, whether it is a first-lien or a second-lien.

Keep in mind that these loan limits apply to the original loan amount of the mortgage loan, not the balance at the time of purchase by Fannie Mae or Freddie Mac.  Read more about these loans directly from Fannie Mae's Lender Letter.

If you are wondering what the high-cost limits are, we've compiled a basic list. These are the applicable loan limits in 2013 for a one-unit property. The following states and counties will remain as is:

California:  $417,000 (all counties except as follows)

•  $463,450: Alpine
•  $474,950: El Dorado, Placer, Sacramento, Yolo
•  $477,250: Nevada
•  $483,000: Monterey
•  $520,950: Sonoma
•  $529,000: Mono
•  $546,250: San Diego
•  $561,200: San Luis Obispo
•  $592,250: Napa
•  $598,000: Ventura
•  $625,500: Alameda, Contra Costa, Los Angeles, Marin, Orange, San Benito, San Francisco, San Mateo, Santa Barbara, Santa Clara, Santa Cruz

Dist. of Columbia: $625,500

Georgia:  $417,000 (all counties except Greene County—conforming jumbo loan limit is $515,200)

Indiana:   $417,000 (all counties)

Maine:    $417,000 (all counties)

New Mexico:  $417,000 (all counties)

New York:  $417,000 (all counties except as follows)

•  $625,500: Bronx, Kings, Nassau, New York, Putnam, Queens, Richmond, Rockland, Suffolk, Westchester

South Carolina:  $417,000 (all counties)

Texas:  $417,000 (all counties)

We apologize if your state is not listed. If you do have any questions, feel free to call 888-883-5252 or take advantage of the live chat feature here.

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FHFA's 2013 Conservatorship Scorecard for the GSEs

Edward J. Demarco, the Acting Director of the Federal Housing Finance Agency (FHFA), has recently released the 2013 Conservatorship Scorecard for Fannie Mae and Freddie Mac.  This "Scorecard" is literally rating their performances on things like "the quality, thoroughness, creativity, effectiveness, and timeliness of their work products." They are also graded on how well they cooperate and collaborate with FHFA, each other, and the industry.

The three keywords that they must focus on are "Build, Contract, and Maintain." These were brought up in 2012 as the three goals of the FHFA's Strategic Plan for the GSEs.

"Build" refers to their goal to "build a new securitization infrastructure platform for the secondary mortgage market."

They must also "Contract the Enterprises dominant presence in the marketplace while simplifying and shrinking certain operations by lines of business."

And finally, they must "Maintain foreclosure prevention activities and credit availability for new and refinanced mortgages."

"Despite some signs of normalization in the housing market, our nation finds itself in the uncomfortable position of having over 90 percent of new mortgage originations supported by the federal government," said DeMarco. "That support is provided directly through government loan programs like the Federal Housing Administration (FHA), and through the financial support that the Treasury Department provides to maintain the solvency of Fannie Mae and Freddie Mac."

In the works is a new "joint company" headed up by the FHFA to focus on securitizing home loans. This is hoped to lead to decreased government involvement in the mortgage market. It would also mean that the FHFA is forcing Fannie Mae and Freddie Mac to abandon their current separate systems and construct a single infrastructure to support the mortgage market. This new entity will be the previously mentioned "joint company". It will be more structured and it will be owned by Fannie Mae and Freddie Mac.

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FHFA's New Guidelines for Short Sales

The FHFA has announced that all existing short sale programs will now be consolidated into one standard program. This short sale program is being issued by Fannie Mae and Freddie Mac in hopes of providing clear guidelines for mortgage servicers that will allow them to quickly and easily qualify eligible borrowers for a short sale. These new guildlines are going into effect on November 1, 2012. Any homeowner who has a mortgage through one of the GSE's will be allowed to sell their home in a short sale if they experience an eligible hardship such as the death of a borrower, divorce or loss of job. These reasons will not require further approval from Fannie Mae or Freddie Mac which helps to prove their commitment to streamlining these types of programs that help homeowners avoid foreclosure. It helps to stabilize communities and the economy.

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Local Governments to Seize Underwater Mortgages?

If you consider the state of the housing market with all of the homes that are still underwater on their mortgages, you may come to the conclusion that the federal programs that promised to help homeowners have not been very successful. True, they have helped many, but overall their assistance is limited.

A new idea has come up that has struck a nerve with mortgage financers: eminent domain. Local governments could write down mortgages in the same way that a piece of land is condemned. The town or county would get the court's approval to pay a "fair market" price to the lendor or investor that is holding a homeowner's underwater mortgage. This would be similar to credit companies selling debt to collectors in that the amount would be substantially less than the unpaid balance. Once approved, the local government would sell the smaller mortgage back to the homeowner who would refinance that amount with a new loan and basically get a second chance on paying their mortgage.

This idea has drawn a lot of controversy. The FHFA has threatened unspecified action against local governments if they opt to seize underwater homes through eminent domain. The FHFA regulates the government-sponsored enterprises Fannie Mae and Freddie Mae hold nearly half of the outstanding mortgages in the US.

In the past, eminent domain has been used in small cases to claim property for new roads for facilities that would somewhat benefit the community. Critics say that seizing individual properties would only benefit homeowners by giving them a break on their loan balance. It is argued that these seizures would serve the public by boosting local housing markets and helping to speed up economic recovery. Despite this, the FHFA is understandably opposed to the idea since they would lose money on every case.

Many opponents of the eminent domain idea claim that this would raise an issue of "moral hazard". If homeowners were given these second chances by having their underwater mortgages cut, they would be encouraged in the future to take on debts that cannot be paid back. It would bring about a whole slew of irresponsible homebuyers who think they can just get bailed out later.

What do you think? Is eminent domain a good idea or would it hurt the economy?

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BofA and GSE's Ongoing Battle

Bank of America has been in the news for quite some time now. They were accused of selling mortgages to people who did not actually qualify. The government sponsored entities, Fannie Mae and Freddie Mac, want BofA to buy back all of the mortgages. This has been a debate for a while and it hasn't made much progress. A settlement would be good news for shareholders as it would alleviate some of the pressure from BofA's stocks. The GSE's have been more strict regarding the bank's policies for mortgages now since the bank accounts for 58% of the GSE's total mortgage repurchase requests. Our sources say that the bank and the GSE's talks have become more productive in the past few weeks and are closing in on an agreement.

Earlier this week a proposal to reduce the mortgages of underwater homes in the U.S. was rejected. FHFA denied the request to allow the GSE's to lower the principal on mortgages where homeowners owe more than the house is actually worth.

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FHFA's 2012 Foreclosure Prevention Report

Since 2008, Fannie Mae and Freddie Mac have completed more than 2.3 million foreclosure prevention actions. This includes 1.1 million permanent loan modifications. All of their activities have been detailed in the FHFA's first quarter 2012 Foreclosure Prevention Report. It is known as the Federal Property Manager's Report and we'd like to share that with you. The report shows information about states with the biggest 5-year decline in house prices, as well as the states with the highest number of delinquent loans. Take a look at it for even more statistics and information.

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FHFA's Foreclosure Prevention and Refinance Report

According to the FHFA's Q4 2011 Foreclosure Prevention and Refinance Report, Fannie Mae and Freddie Mac have completed more than 2.1 million foreclosure prevention actions to help keep borrowers in their homes. This includes 1.1 million permanent loan modifications. Additionally, fewer than 20% of these loans that were modified in the four quarts ended March 31, 2011 had missed two or more payments which is an improvement from previous years.

The FHFA has also released an interactive Fannie Mae and Freddie Mac State Borrower Assistance Map that allows you to see how many loans are owned or guaranteed by the GSEs, and how many of which are delinquent, in foreclosure or refinanced per state. There are more statistics involved as well in this report. Click here to view more.

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Fannie Mae Requests More Bailout Money

We have discussed Fannie Mae several times. You know that it is a GSE that is under the conservatorship of the FHFA. You know that it is constantly in the news for various reasons. Today, Fannie Mae is in the news because it has requested a large sum of money. Reportedly, Fannie has lost $2.4 billion during the fourth quarter of 2011. Its revenue is sitting at $4.5 billion. Because of its deficit, Fannie Mae is seeking aid from the government in the form of $4.6 billion.

We also reported that there are many efforts underway regarding shutting down Fannie Mae and Freddie Mac. The government no longer wants to support them, but rather have them be a more privately-owned enterprise. As of now, taxpayers have spent $150 billion trying to maintain the GSEs. A new estimate is saying that figure could be upwards of $260 billion by the end of 2014 just to keep the companies afloat. You can see why the government wants to bail on them: Fannie alone is proving to be one of the most expensive single-company bailouts in history. So far Fannie has taken a whopping $116 billion from the U.S. Department of Treasury.

Fannie isn't the only one, though. Freddie Mac has requested its fair share of bailout money. In November, a request was made for $6 billion in financial assistance after it reportedly lost that much during the third quarter of 2011.

What do you think is the best solution? Is the government doing the right thing by bailing them out so often despite it coming straight from the taxpayers' pocket? Should the government just tell them to take their losses?  Leave your thoughts below!

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Government Seeks to Shut Down Fannie and Freddie

The FHFA, who oversees GSEs Fannie Mae and Freddie Mac as a conservator, has a plan to shrink their involvement in the housing market over time. They want to create a new market for mortgage-backed securities; something more privately-owned rather than government-backed. Fannie and Freddie have had a major part in keeping the housing finance market going during the country's recession and economic hardship. They currently represent 75% of all new home loans, which equals to nearly $100 billion a month in mortgages.

However, President Obama and Congress seek to shut down Fannie and Freddie so they can ultimately reduce the role that the government plays in the mortgage market. There is not yet an official plan on how to squeeze out the GSEs without causing further damage to the housing market, but the goal is to transition in a new structure of how the housing finance market works.

This all relates to the story we reported on earlier about the FHFA's acting director Edward DeMarco's new plan. It involves building a new infrastructure for the mortgage market, shrinking Fannie's and Freddie's presence in the market, and doing whatever it takes to reduce the amount of foreclosures. It is not possible to simply bring an end to Fannie and Freddie, however. Doing so without implementing a new structure would drive up interest rates and limit the availability of loans.

A year ago, a plan was proposed to slowly shut down the GSEs over a span of 5-10 years. It suggested doing this in one of three ways: providing limited government guarantees of some mortgages, providing an emergency backstop role but only during a recession, or completely pulling the federal government away from the mortgage market. A decision regarding these options has not been made.

Fannie and Freddie have relied on bailout money in recent years, and it is hindering the country's economic recovery. The housing market will continue to have issues until these government-backed mortgage-finance companies are replaced with a private-market solution. Once this is accomplished, the government hopes that efforts to repair the damage to homeowners and the housing market will boost in effectiveness.

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FHFA's Next Step Regarding GSE Conservatorship

In February 2010, the FHFA's Acting Director Edward J. DeMarco wrote a letter to Congress regarding conservatorships of the GSEs Fannie Mae and Freddie Mac. Recently, he has also released the next phase of his plan that builds on what he wrote in that letter 2 years ago. It is meant to update and extend the goals of these conservatorships.

First of all, what is a conservatorship? The FHFA is the conservator, or an organization that has legal control over another entity, which would in this case be the GSEs. Fannie Mae and Freddie Mac have received $180 billion in taxpayer support since they have been placed into conservatorship in September 2008.

DeMarco's plan will establish objectives that the FHFA is to take in order to meet its obligations as a conservator. It consists of three strategic goals. First of all, the FHFA will build a brand new infrastructure for the secondary mortgage market that will be consistent with existing policy. Second, they hope to contract the GSEs' dominant presence in the marketplace by simplifying and shrinking their operations. And lastly, they will work to maintain foreclosure prevention activities and credit availability for mortgages, both new and refinanced. The end goal is to come to a resolution for the conservatorships and to review the housing finance system.

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FHFA's "Pilot Phase" for REO Initiative

Here is some more information about the Federal Housing Finance Agency's new REO Initiative regarding turning REO's into rentals. They are starting off simple with a "pilot phase" that is excepted to include 500 to 1000 homes provided by Fannie Mae. The GSEs have more than one million foreclosure properties in their possession.

The purpose of this pilot phase is to examine:

• Investor interest in various types of assets
• How investors can maximize the participation of experienced local firms and organizations that can provide the types of services and support needed for stabilization in the community
• The types of structures and financing that would improve returns to the sellers as well as the value of the homes
• The process that qualifies these investors and how they participate in sales transactions

There is no indication of a timetable for beginning bulk REO sales yet. The FHFA is hoping that this pilot phase will prove beneficial to investors, homeowners, GSEs and also to the economic status of the housing market and the country as a whole. Their focus is on the nation's hardest-hit areas first. They'd also like to improve REO sales for homeowners and small investors that will enhance the existing retail sales strategies of the GSEs.

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REO Initiative to Rent Out Foreclosed Properties

The FHFA has announced the first step of an REO initiative that will aim to help the cities that got hit the hardest nationwide. Investors can pre-qualify to establish eligibility so they can bid on transactions during this initial phase. Qualified investors will be allowed to purchase foreclosed properties but they are required to rent these out for a specified number of years. The hope is that this rental period will provide relief for depressed housing markets that are overwhelmed by foreclosed properties, and will also provide more rental options. This should put the country one step closer to stabilizing communities and maximizing the value of homes.

This REO Initiative is partnered with the U.S. Department of the Treasury, the HUD, the FDIC, the Federal Reserve, Fannie Mae and Freddie Mac. They worked together to find options for selling single-family REO properties that are currently held by Fannie Mae, Freddie Mac and the FHA. During this first phase, Fannie Mae will offer pools of rental properties, vacant properties and non-performing loans focusing on the areas that were hit the hardest.

Those that have pre-qualified to receive more information about these properties must meet the following criteria: (a) financial wherewithal to acquire the assets; (b) sufficient experience and knowledge in financial and business matters to analyze and bear the risks of the investment opportunity; and (c) agreement to keep certain information about the REO and related matters confidential.

Investors can register at the FHFA's REO Initiative page.

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Reported $25 Billion Deal Reached between Banks and AGs

As we mentioned yesterday, this $25 billion deal between the five largest banks in American and U.S. State Attorneys General nationwide will make it easier for those facing foreclosure to restructure their loans. The final draft of this agreement has been submitted for review.

This settlement would apply to privately-held mortgages that were issued between 2008-2011. It does not, however, apply to loans held by GSEs Fannie Mae or Freddie Mac. This means that nearly 750,000 homeowners could get the principal amount of their mortgages written down by $20,000.

Under the terms of this deal, $17 billion would be used toward reducing the principal that homeowners owe on their mortgages. Also, $5 billion would be placed in a reserve account for various state and federal programs. Part of that money would cover checks that will be sent to nearly 750,000 homeowners that were affected by deceptive foreclosure practices, amounting to $1,800 each. The final $3 billion would be dedicated toward the refinancing of homes nationwide at 5.25 percent. This proposal is expected to be adopted within a few weeks.

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Congressional Push for Fannie/Freddie Principal Reduction

Congressional Democrats are currently pushing for a Fannie Mae and Freddie Mac Principal Reduction. If a settlement with banks isn't helpful enough for homeowners, they want a federal housing regulator to write down mortgage principal for these government-backed loans.

The federal government is actually very close to coming to an agreement with mortgage servicers that could help nearly a million homeowners. The deal would require the nation's five largest banks -JP Morgan Chase, Wells Fargo, Bank of American, Citigroup and Ally Financial- to spend more than $25 billion to help borrowers who had signed off on foreclosure paperwork without reviewing the documents properly.

It is not yet clear who would be eligible for this settlement that would offer 1 million borrowers an average of $20,000 in principal reduction.

If this settlement doesn't help those who are with Fannie Mae and Freddie Mac, more than likely the Democratic lawmakers will continue to push the Federal Housing Finance Agency (FHFA) to provide homeowners with these principal reductions. They especially want to help those who owe more than their houses are worth.

This settlement is expected to be the largest principal reduction of the housing crisis and will hopefully boost the economy and housing market. However, this deal could take several more weeks to complete. The White House was hoping for a resolution by Christmas, but they are now hoping it will be resolved by Tuesday's State of the Union address. They want to have all 50 states sign on to a final deal but they may not meet that goal.

For more information about this, view our source.

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HARPs New Guidelines for Homeowners to Refinance

Good news for homeowners from the federal government! The Home Affordable Refinance Program (HARP) has recently changed its guidelines to allow homeowners to refinance at today's lower mortgage rates even if their homes have declined in value. Depending on the loan they choose, homeowners can now refinance without LTV limits. This will help them to improve cash flow to pay off their mortgages easier and, hopefully, not be hesitant to become a homebuyer again in the future. HARP works with primary residences, second homes and investment properties.

HARP was established in 2009 to help homeowners with good payment history to refinance into more affordable mortgages despite declining home values. Originially, HARP capped LTVs at 125 percent for fixed rate loans, and 105 percent for adjustable rate loans. It maintains its ARM cap, but now there is not a limit for the LTV for a fixed rate mortgage of 30 years or less. However, if the loan is for more than 30 and up to 40 years, it is still capped at 105 percent.

This is very good news for those who are in states that were hit hardest by declining home values such as Arizona, California, Nevada and Florida. Mortgage rates are at the lowest levels in decades. Now is an opportune time for homeowners to take advantage of HARPs new policy and reduce their interest rate and monthly payments. They could then pay off their loans faster due to shortening the loan terms. This could lead to them making more real estate investments in the future as well.

To qualify for HARP, the property cannot have been refinanced by HARP before. The loan needs to have been originated before May 31st 2009 and be associated with Fannie Mae or Freddie Mac. No private mortgage insurance is required if it wasn't needed for the original loan and income documentation is not necessary. The amount of the loan just can't exceed the conforming loan limits for the property's location. The loan must be current and the borrower cannot have made late payments in the last six months, and no more than one late payment in the last 12 months.

If you feel as though you are drowning in the stress of being behind on your mortgage, HARP urges you to take advantage of this once-in-a-lifetime opportunity while you can! HARP wants to help bring you back into the home buying market with these low rates. Look into it today!

Source

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CEO of Fannie Mae Resigning

The Chief Executive Officer of Fannie Mae, Michael J. Williams has just announced his departure from the Government Sponsored Enterprise (GSE). He first took on this role of CEO in 2009 when Fannie Mae was placed under the Federal Housing Finance Agency (FHFA).  Williams will remain in this position until the board of directors chooses a new CEO and director to take his place.

“As CEO, I have focused the company on providing the necessary funding to support sustainable homeownership and quality affordable housing; creating the solutions needed to stabilize the market and help homeowners in distress; and building a strong new leadership team that can move the company and the industry forward,” said Williams. “For the past three years, we have executed on this important mission, while making fundamental changes to prepare housing finance for a better future. I decided the time is right to turn over the reins to a new leader. As I told our employees today, I am extremely proud of what we have achieved together, and I am confident that they will continue to make a positive difference.”

Williams has accomplished much during his years at Fannie Mae. He started in 1991 leading the eCommerce and eBusiness divisions, including the development of the Desktop Underwriter product. He has also helped  to enable approximately six million households to refinance into a lower cost mortgage, 1.7 million homeowners to purchase a home, and provided financing for nearly one million units of quality, affordable rental housing.

The question is: how will his departure effect Fannie Mae and its operations? And in turn, homeowners and lenders?


Source: http://nationalmortgageprofessional.com/news27890/michael-williams-resign-ceo-fannie-mae

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