Are principal reductions just around the corner?

The appointment of Rep. Mel Watt, D-N.C., to head of the Federal Housing Finance Agency, the overseer of Fannie Mae and Freddie Mac, could have a substantial impact on the Home Affordable Modification Program (HAMP).

Rep. Watt supports principal reductions, or at least he has supported them in the past. Acting head of the FHFA, Ed DeMarco, has been mostly opposed to principal reductions, causing some to call for his job.

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Exotic mortgages that are costly or potentially difficult for borrowers to repay might be taking another step toward extinction.

That’s because the Federal Housing Finance Agency (FHFA) has directed Fannie Mae and Freddie Mac to limit future mortgage purchases to those that: Read the rest of this entry »

Homeowners who don’t make a mortgage payment for at least 90 days will soon be eligible for a new no-documentation loan modification program.

The new Streamlined Modification Initiative, announced late last month by the Federal Housing Finance Agency (FHFA), is intended to help borrowers avoid foreclosure and keep their homes. Eliminating the documentation requirement is expected to enable significantly more borrowers to obtain a loan modification.

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Nearly five years after the takeover of Fannie Mae and Freddie Mac, the federal government has made little meaningful progress to bring the government’s conservatorship to an end.

That’s according to Ed DeMarco, acting director of the Federal Housing Finance Agency (FHFA), which has oversight responsibility for the two government-sponsored mortgage corporations or “Enterprises.” DeMarco delivered his thoughts in testimony Tuesday to the U.S. House Committee on Financial Services. Read the rest of this entry »

Just after a report was released last week criticizing the current role of the government in our nation’s mortgage market, the overseer of Fannie Mae and Freddie Mac announced Monday that a portion of the firms will merge in an effort to begin the transformation away from government conservatorship.

Ed DeMarco, acting head of the Federal Housing Finance Agency which oversees Fannie and Freddie, said in remarks prepared for an economic policy conference Washington, D.C. Monday, that the goal here was to “create something of value that could either be sold or used by policymakers as a foundational element of the mortgage market of the future.”

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Beginning March 1, 2013, Fannie Mae and Freddie Mac will allow homeowners to apply for a deed-in-lieu of foreclosure even if they have been making on-time payments. Until recently, Fannie and Freddie borrowers were only allowed to engage in a deed-in-lieu if they were 90 days or more delinquent. In some cases, homeowners were even encouraged to stop making mortgage payments–even if they could afford them–in order to qualify.

A deed-in-lieu of foreclosure is when a homeowner who can no longer afford their mortgage voluntarily gives back their home to the bank in exchange for having their mortgage debt wiped clean. While a deed-in-lieu of foreclosure will have a negative impact on your credit score, it can be the fastest way to escape an unsustainable situation. Read the rest of this entry »

The post below first appeared on U.S. News & World Report’s Home Front blog on Nov. 20. A special thanks to Meg Handley and the entire Home Front team:

Experts often advise mortgage borrowers to “shop around.” But although it seems that phase is heard ad nauseum, according to government mortgage giant Fannie Mae, many consumers still do not “adequately investigate or fail to understand fully the choices available to them” when it comes to selecting a home loan.

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The post below was written by HSH.com contributing writer Poonkulali Thangavelu. This is Poonka’s first contribution to the blog.

In a bid to follow up on the Federal Housing Finance Agency’s (FHFA) directive to streamline their “deed-in-lieu of foreclosure” program, Fannie Mae has announced some changes–their first being to replace all references of “deed-in-lieu of foreclosure” with “Mortgage Release” program.

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According to the latest Weekly Mortgage Rates Radar, rates on the most popular types of mortgages declined this week. The average rate for conforming 30-year fixed-rate mortgages fell by four basis points (0.04 percent) to 3.66 percent. Conforming 5/1 Hybrid ARM rates decreased by five basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 2.73 percent.

“The economic news continues to be tilted in a downward direction,” said Keith Gumbinger, vice president of HSH.com. “Additionally, fresh worries about Spain’s ability to manage its fiscal troubles gives global investors more reasons to pump money into the safety of US Treasury debt, driving yields lower.”

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Would no mortgage payments for a year help if you were unemployed? You bet. And now the government has two such programs, including one announced just last week.

While the FHA has had a concrete forbearance program in place for some time, last Friday Freddie Mac announced that servicers now “must” assist borrowers who are suffering financial hardships due to their unemployment. Furthermore, Freddie’s program can be extended for as long as one year. Read the rest of this entry »