Harold Perkins & Mary Ellen Kohut
YOUR IN-HOUSE LENDING TEAM
800-499-2183
Save the date! It will be official after October 1st. The union of FannieMae, FreddieMac and the Federal government will have the blessing of law with all of the rights of intermingling including an unlimited checking account balance if they were to ever need it. After reading the massive, 700 page THE HOUSING & ECONOMIC RECOVERY ACT OF 2008 H.R. 3221 in my comfy chair and my favorite flavor of water (drinking an adult beverage is not recommended or you will go running to your “People” magazine) the following is a quick overview. The Senate is expected to sign the bill early next week and become law October 1st. The bill is divided into two sections: The first section is the non-bailout, bailout, of Fannie and Freddie and the regulation of both. The second section is the “Save Our Housing Industry” with many “perks” for current homeowners and prospective home buyers. Or are they? FHA will allow homeowners (primary residence only) to refinance their homes to an FHA fixed rate loan if they are at risk for foreclosure from mortgages they took out over the past couple of years. FHA will refinance up to 90% of the current appraised value. This is a voluntary program and the homeowner’s current lender (or lenders, if they purchased with an 80/20) will have to agree to a “short refinance”. The homeowner will also have to agree to split any future equity with FHA if they sell their home or refi again. Current income will be verified and within FHA guidelines. The house payment cannot be more than 31% of the documented monthly gross income. Issues? There are a few. Some lenders may not agree to a short refinance as they may make more money letting the home go into foreclosure because of agreements the banks have with their investors. Many of the “at risk of foreclosure” homeowners are tapped out on credit cards or other loans to save their residences, so they are not going to qualify because of the ratio ceiling. And if you purchased your home with a “stated” program? Forgetaboutit.
Loan limits will be raised in SOME AREAS. Bets on Maricopa and Pinal County? We will see. The $625,000 that is bouncing around the news is NOT FOR OUR AREA. The Law makers did not take into consideration the “at risk homeowners” with the higher home prices in
The FHA down payment requirement will be raised to 3.5% of the purchase price from 3%. Down payment Assistance Programs (Nehemiah and Ameridream) will be terminated. You read it right. H.R. 3221 is eliminating the DPA’s and increasing the FHA down payment amount.
There will be a “tax refund” for first-time homebuyers for up to $7500. Except it is really a loan since it has to be paid back over 15 years. Huh? Well, you take the full amount as a tax credit the first year and pay it a back over 15 equal installments. And when you sell your home you have to pay it back.
So who are the winners for the new bill other than Fannie and Freddie?
Truth In Lending Promotes Trust In Lending
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