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Wednesday, December 28, 2011

We’ve heard of Freddie Mac; what is it?

We’ve heard of Freddie Mac; what is it?


Freddie Mac was created by the United States Congress in 1970. Its publicly stated mission is to stabilize the nation's residential mortgage markets and expand opportunities for homeownership and affordable rental housing. Under Federal law, Freddie Mac’s mission is to:



  1. provide stability in the secondary market for residential mortgages;

  2. respond appropriately to the private capital market;

  3. provide ongoing assistance to the secondary market for residential mortgages (including for lower income families); and

  4. to promote access to mortgage credit.


Freddie Mac does not loan money to would-be property owners the way that banks do. Rather, it participates in the secondary mortgage market by purchasing mortgage loans and mortgage-related securities for investment and by issuing guaranteed mortgage-related securities. The secondary mortgage market consists of institutions engaged in buying and selling mortgages in the form of whole loans (i.e., mortgages that have not been securitized) and mortgage-related securities.


Due to the housing/mortgage crisis in America, Freddie Mac currently focuses on “meeting the urgent liquidity needs of the U.S. residential mortgage market, lowering costs for borrowers and supporting the recovery of the housing market and U.S. economy.” Specifically, Freddie Mac states that it is working toward reducing the number of foreclosures; making homeownership and rental housing more affordable; and helping families keep their homes.


McGrath & Spielberger, PLLC provides assistance to borrowers in need of mortgage relief services, such as mortgage loan modification, foreclosure negotiation, refinancing, and deed-in-lieu or other negotiated settlement resolutions. These professional services may include dealing with mortgage loans owned or securitized by Freddie Mac.

Friday, December 23, 2011

We’ve heard of Fannie Mae; what, exactly, is it?

We’ve heard of Fannie Mae; what, exactly, is it?


Fannie Mae was created by the United States Congress in 1938 to support liquidity, stability, and affordability in the secondary mortgage market, where existing mortgage-related assets are purchased and sold. Fannie Mae itself has stated that it has “a mission to expand affordable housing”.


Fannie Mae does not originate loans or lend money directly to consumers in the primary mortgage market because Federal law prevents it from doing so. However, it does purchase mortgage loans and mortgage-related securities. In other words, while you can’t get a loan from Fannie Mae, Fannie Mae might end up owning your mortgage loan.


Fannie Mae also often securitizes mortgage loans originated by lenders into Fannie Mae mortgage-backed securities (called Fannie Mae MBS)  and makes other investments which are intended to increase the supply of affordable housing.


McGrath & Spielberger, PLLC provides assistance to borrowers in need of mortgage relief services, such as mortgage loan modification, foreclosure negotiation, refinancing, and deed-in-lieu or other negotiated settlement resolutions. These professional services may include dealing with mortgage loans owned or securitized by Fannie Mae.

Tuesday, December 20, 2011

HARP: Refinancing for Underwater Mortgage Loans

HARP: Refinancing for Underwater Mortgage Loans


As an attorney who assists borrowers with mortgage loan modifications, foreclosure negotiations, refinancing, deeds-in-lieu, and other mortgage loan relief, one of the most common complaints that I hear is that borrowers who continue to pay their mortgage loans are essentially penalized for living up to their obligations: “I’m current on my mortgage, so the bank won’t modify it. My house is underwater, so I can’t refinance. How come it’s only the people who aren’t paying their mortgages who get help, while I get punished for continuing to pay mine?”


Well, the Home Affordable Refinance Program (HARP) may be for you, my responsible yet underwater friends.


HARP is specifically designed to assist borrowers who have an unfavorable loan – to – value ratio (LTV). These borrowers have little equity, no equity, or negative equity in their homes and have likely seen the value of their property decrease over the last few years, often becoming worth less than what is owed on the mortgage loan(s).


There is less information available about HARP when compared to what is known about other government – backed mortgage relief programs, but Fannie Mae has publicly stated that “If you don’t have any equity [in your home], you may still qualify for the government’s Home Affordable Refinance Program.”


Who qualifies for the Government’s Home Affordable Refinance Program (HARP)? According to the US Government, the following mortgage loans may qualify:



  1. The mortgage loan must be owned or guaranteed by Freddie Mac or Fannie Mae.

  2. Freddie Mac or Fannie Mae must have obtained their interest in the loan before May 31, 2009.

  3. The mortgage loan must be current with a good payment history for the preceding 12 months.

  4. The mortgage loan must not have been previously refinanced via HARP (except for Fannie Mae HARP refinances which took place between March and May, 2009).

  5. The current LTV must be greater than 80%. For example, if you owe $500,000 but your home is now only worth $400,000, your LTV is 125% (greater than 80%).


 A refinance through HARP should result in lower monthly payments. Keep in mind, however, that applying for refinancing via HARP is applying for a new loan. Thus a loan application needs to be completed, refinancing fees apply, and an underwriting evaluation process will occur. You must be current on your mortgage loan to qualify for HARP.


If a traditional or HARP refinance isn’t the right option for you, but you want to keep your property, a mortgage loan modification may be an option. While making it through the mortgage loan modification process can be challenging, it can be done.


McGrath & Spielberger, PLLC provides assistance to borrowers in need of mortgage relief services, such as mortgage loan modification, foreclosure negotiation, refinancing, and deed-in-lieu or other negotiated settlement resolutions.

Thursday, December 15, 2011

HARP: Who Qualifies for Government Mortgage Refinancing?

HARP: Who Qualifies for Government Mortgage Refinancing?


Who qualifies for the Government’s Home Affordable Refinance Program (HARP)? According to the US Government, the following mortgage loans may qualify:



  1. The mortgage loan must be owned or guaranteed by Freddie Mac or Fannie Mae.

  2. Freddie Mac or Fannie Mae must have obtained their interest in the loan before May 31, 2009.

  3. The mortgage loan must be current with a good payment history for the preceding 12 months.

  4. The mortgage loan must not have been previously refinanced via HARP (except for Fannie Mae HARP refinances which took place between March and May, 2009).

  5. The current loan – to – value (LTV) ratio must be greater than 80%.

    1. a.      For example, if you owe $500,000 but your home is now only worth $400,000, your LTV is 125% (greater than 80%).



 A refinance through HARP should result in lower monthly payments. Keep in mind, however, that applying for refinancing via HARP is applying for a new loan. Thus a loan application needs to be completed, refinancing fees apply, and an underwriting evaluation process will occur. You must be current on your mortgage loan to qualify for HARP.


If a traditional or HARP refinance isn’t the right option for you, but you want to keep your property, a mortgage loan modification may be an option. While making it through the mortgage loan modification process can be challenging, it can be done.


McGrath & Spielberger, PLLC provides assistance to borrowers in need of mortgage relief services, such as mortgage loan modification, foreclosure negotiation, refinancing, and deed-in-lieu or other negotiated settlement resolutions.

Monday, December 12, 2011

Government Mortgage Refinancing for Borrowers who are Current

 HARP: Government Mortgage Refinancing for Borrowers who are Current


 


According to the United States Government, the Home Affordable Refinance Program (HARP) is designed to help borrowers who are unable to obtain a traditional refinance due to their home’s decline in value. A refinance through HARP should result in lower monthly payments. Keep in mind, however, that applying for refinancing via HARP is applying for a new loan. Thus a loan application needs to be completed, refinancing fees apply, and an underwriting evaluation process will occur. You must be current on your mortgage loan to qualify for HARP.


If a traditional or HARP refinance isn’t the right option for you, a mortgage loan modification may be an option. While making it through the mortgage loan modification process can be challenging, it can be done.


McGrath & Spielberger, PLLC provides assistance to borrowers in need of mortgage relief services, such as mortgage loan modification, foreclosure negotiation, and deed-in-lieu or other negotiated settlement resolutions.

Friday, December 2, 2011

More than 1 of every 5 Americans with a Mortgage Loan is "Underwater"!

More than 1 of every 5 Americans with a Mortgage Loan is "Underwater"!


Some key pieces of information extracted from CoreLogic's comprehensive report from the third quarter of 2011:



  • North Carolina: 12% of mortgaged homes are underwater (lower than the national average of 22%).



  • South Carolina: 15.5% of mortgaged homes are underwater.



  • Florida has the third highest percentage of  mortgaged homes underwater - 44%. I'm really happy to report that my wife and I are part of that 44%. 



  • Georgia (30%, 5th highest in the country) now has a higher percentage of underwater homes than California.



  • Tennessee: 14.7% of mortgaged homes are underwater.



  • Ohio (22.6%) is almost right at the national average.



McGrath & Spielberger, PLLC provides professional legal services for those in need of mortgage relief, including mortgage loan modifications, foreclosure negotiations, and deeds-in-lieu. 

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by Jann Swanson


CoreLogic: 27% of Homes in Negative or Near Negative Equity Position


Nov 29 2011, 11:53AM


Over one-quarter of all mortgaged homes in the U.S. are now either underwater or close to it according to data released today by CoreLogic. In the third quarter of 201110.7 million homeowners, 22.1 percent of all those with mortgages, owed more on that mortgage than the market value of their homes. This situation arises when prices decline, mortgage debt increases, or a combination of the two. An additional 2.4 million homeowners were in a near-negative equity situation with mortgage balances only five percent or less below the value of the home. In total, homes with negative or near negative equity account for 27.1 percent of all mortgaged property, down from 27.5 percent in the second quarter.


"Although slightly down, negative equity remains very high and renders many borrowers vulnerable when negative economic shocks occur, such as job loss or illness. The nearly $700 billion mortgage debt overhang has touched many corners of the market, and this overhang is holding back the recovery of the housing market and broader economy," said Mark Fleming, chief economist with CoreLogic.


While negative equity can be the result of multiple mortgages on the property, 6.3 million borrowers (59 percent) have only first mortgages. However those borrowers represent only 18 percent of all borrowers with only one mortgage on their home. These loans have an average balance of $222,000 and are underwater by an average of $52,000, an average loan-to-value (LTV) ratio of 131 percent. First liens without home equity loans account for $329 billion aggregate negative equity out of the national total of $699 billion.


The 4.4 million borrowers with a mortgage and a home equity loan have an average mortgage balance of $309,000 and are underwater by an average of $84,000 with an average LTV of 137 percent. Multiple mortgage holders with negative equity represent 38 percent of all multiple mortgage holders. First equity liens with home equity loans have an aggregate outstanding balance of $190 billion on the first liens.


Negative equity homeowners are more likely to have above market interest rates than other homeowners. Twenty-two million borrowers (45 percent of the total) have LTVs above 80 percent and 69 percent of them have mortgages with above-market interest rates compared to 54 percent of homeowners with less than 80 percent LTV. While above-market interest rates make refinancing at today's historically low rates a cost-effective step for qualified homeowners, it can be more difficult for borrowers with above-average LTV ratios to qualify for refinancing.


Conventional loans account for 8.6 million of the negative equity loans. These have an average outstanding balance of $272,000 and have an average negative equity of $70,000. The 1.5 million negative equity FHA loans have an average balance of $170,000 and negative equity of $26,000. CoreLogic estimates that 1.6 million properties valued at an aggregate negative equity of $105,000 are housed in bank portfolios.


Nevada has the highest negative equity percentage with 58 percent of all of its mortgaged properties underwater, followed by Arizona (47 percent), Florida (44 percent), Michigan (35 percent) and Georgia (30 percent). This is the first quarter that Georgia entered the top five, surpassing California which had been in the top five since tracking began in 2009. These five state combined have an average negative equity ratio of 41.4 percent, while the remaining states have a combined average negative equity ratio of 17.6 percent.


CoreLogic based its analysis on its data base of 48 million properties with a mortgage which includes over 85 percent of all mortgages in the country. Current home values are derived from CoreLogic Automated Valuation Models for residential properties.


by Jann Swanson