Seniors who want to tap their home equity through a reverse mortgage might want to keep a close watch on the Federal Housing Administration (FHA).
The Home Equity Conversion Mortgage (HECM) program, a reverse mortgage backed by the FHA, is showing signs of substantial stress, and U.S. Department of Housing and Urban Development (HUD) Secretary Shaun Donovan has a plan to relieve the pressure. Read the rest of this entry »
The report is in. It’s not good.
The “Annual Report to Congress Regarding the Financial Status of the FHA Mutual Mortgage Insurance Fund Fiscal Year 2012” shows the FHA’s reserve fund has fallen to -1.44 percent—far below the 2 percent cushion mandated by Congress, and may open the door to the first infusion of government cash in the insurer’s 78-year history.
The robo-signing crisis has resulted in an immediate and closer examination of how servicers are processing the influx of foreclosures. What started out with one servicer halting foreclosures in about 23 states has quickly turned into a national crisis affecting servicers in every state.
Federal regulators and attorney generals are working with servicers to determine if their improper procedures resulted in unjust foreclosures. Whether the foreclosures were justified or not, “No one should lose their home as a result of a bank mistake,” writes HUD Secretary Shaun Donovan: Read the rest of this entry »
Late last week President Obama signed a one-year extension to keep Fannie Mae and Freddie Mac’s loan limits at $729,750. H.R. 3081 not only kept the higher loan limits in place, but it also allocated an extra $20 billion to the FHA’s General and Special Risk Insurance Fund (that money is designed to keep the FHA lending at least through the end of the year, explains Housing Wire).
About two weeks ago we wrote a post titled “Here’s Washington’s chance to step aside.” After both Treasury Secretary Timothy Geithner and HUD Secretary Shaun Donovan expressed the need for the government to play a smaller role in the housing market, we thought that lowering Fannie and Freddie’s loan limits could be Washington’s first step in returning some of the market control over to the private sector. That didn’t happen.
Homebuyer tax credit: Third time’s the charm?
According to the most recent numbers, since it was first introduced in 2008, the homebuyer tax credit helped 3.3 million homeowners and cost the country $23.5 billion.
After President Obama extended the closing deadline to the second portion of the homebuyer tax credit back on July 2, 2010, most of us thought that was it for the credit. However, the homebuyer tax credit has been back in the news ever since HUD Secretary Shaun Donovan failed to give a reporter a straight answer when asked whether the administration was considering a third tax credit.
According to the most recent numbers, since it was first introduced in 2008, the homebuyer tax credit helped 3.3 million homeowners and cost the country $23.5 billion.
After President Obama extended the closing deadline to the second portion of the homebuyer tax credit back on July 2, 2010, most of us thought that was it for the credit. However, the homebuyer tax credit has been back in the news ever since HUD Secretary Shaun Donovan failed to give a reporter a straight answer when asked whether the administration was considering a third tax credit.
HUD Secretary Shaun Donovan testified today before the House Committee on Financial Services to explain the new measures that will implemented in order to better promote the Federal Housing Administration’s solvency (FHA) moving forward.
Earlier this year, we warned that the FHA could be the next taxpayer bailout, and we also noted that the FHA could quickly turn into the next subprime lender. Yet, today on Capitol Hill, Secretary Donovan said the FHA is neither. These new measures, according to Donovan, “will be focusing primarily on three areas: enforcement, improving the quality and sustainability of new loans insured by FHA, and increasing FHA capital.”
HUD Secretary Shaun Donovan announced this afternoon that Fannie Mae and Freddie Mac will now begin refinancing loans with a loan-to-value (LTV) of up to 125% under the Home Affordable Refinance Program. Federal officials have concluded that by expanding the eligibility of the effort, more underwater homeowners will be able to refinance, spurring the recovery of the housing market:
“This decision is part of our ongoing efforts to maximize the effectiveness of the Making Home Affordable program and adapt to an ever-changing housing market,” said Treasury Secretary Tim Geithner. “By expanding refinance eligibility, we can bring relief to more struggling homeowners more quickly. It’s a crucial step in our broader efforts to get America’s housing market and economy on the path to recovery.”
UPDATE5: IT”S OFFICIAL — for the time being at least. HUD announced the finalized details of their plan to allow FHA borrowers to “monetize” the $8,000 first-time homebuyer’s tax credit provided under the president’s American Recovery and Reinvestment Act of 2009. While the tax credit CANNOT be used to meet the downpayment requirement, it can be used to contribute to either a higher downpayment or to pay for closing costs:
Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent downpayment on the purchase of their home. Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5 percent minimum down payment, but, under the terms of today’s announcement, lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate.
HUD has made good on their promise to investigate and crack down upon the fraud permeating through the FHA loan market. Yesterday, HUD announced sanctions against more than 120 FHA-approved lenders.
Click here for the complete list of sanctioned lenders and their violations.
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