On April 9th, Governor Chet Culver signed SF 364 titled, "an Act relating to civil actions including certain limitations on actions, judgments, and executions and including actions relating to the foreclosure of real estate mortgages, and providing effective date and applicability provisions".
Additional information is provided in the following article from the Quad-City Times.
Iowa Senate votes to help people facing foreclosure
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DES MOINES — The Iowa Senate voted Tuesday to provide more leeway for a growing number of Iowans facing foreclosure because they are behind in making their mortgage payments.
Senate File 364, which passed on a 50-0 vote, is designed to improve the opportunity for mortgage holders to work with their lenders to stave off civil default judgments.
“This is a major issue facing Iowans,” said Sen. Rob Hogg, D-Cedar Rapids. “This bill will help us address the foreclosure crisis and provide additional protections for the homeowner whose property is being foreclosed.”
The number of Iowa properties subject to civil mortgage foreclosure action has nearly doubled from 5,507 in 2002 to nearly 11,000 last year, according to the preliminary estimates.
The bill requires mediation notices “prior to commencing an action” on a residence — a provision that is effective through July 1, 2011. The legislation allows for a 60-day delay in foreclosure sales, and it also provides that lenders may rescind foreclosure action to negotiate a voluntary workout.
Hogg said the proposed change should help reduce unnecessary cost to parties involved in foreclosure proceedings. The bill also should help communities by reducing bureaucratic red tape that stops foreclosed property from being resold or returned to productive use, he said.
In separate action, the Senate voted 50-0 to establish licensing requirements for mortgage loan originators to ensure the lending industry is operating without unfair, deceptive or fraudulent practices.
“Senate File 355 toughens state laws governing mortgage bankers and brokers to fight shady operators who helped cause the national mortgage mess,” said Sen. Swati Dandekar, D-Marion, the bill’s floor manager.
Entire Bill: http://coolice.legis.state.ia.us/Cool-ICE/default.asp?Category=billinfo&Service=Billbook&menu=false&hbill=SF364
Thursday, May 28, 2009
Illinois SB 2513 New Requirement on lenders & Servicers
Illinois SB 2513The Governor of Illinois has officially signed Bill 2513 into law, which provides new requirements on lenders and servicers.
SB 2513 applies to all loans secured by residential real property, except for those loans that the borrower has previously filed bankruptcy or which the property is not the borrower's principal residence.
SB 2513:
If a residential real property loan falls into default by more than thirty days, the mortgagee must send a "Grace Period Notice."
The law further imposes a second grace period that could extend the original grace period by up to an additional thirty days under certain circumstances.
The Governor of Illinois has officially signed Bill 2513 into law, which provides new requirements on lenders and servicers. The new requirements are effective immediately. Therefore, the new requirements must be adhered to beginning on April 6, 2009.
Applicable to Loans Secured by Borrower's Principal Residence OnlyThe law will apply to all loans secured by residential real property, except for those loans that the borrower has previously filed bankruptcy or which the property is not the borrower's principal residence. The law will apply only once per loan (i.e. if the law is complied with for a previous default, there is no requirement to comply with the law on any subsequent defaults).
Required Thirty Day "Grace Period Notice" If a residential real property loan falls into default by more than thirty days, the mortgagee must send a "Grace Period Notice." This Notice must be sent as a separate letter than any default or breach letter, but can be sent at the same time as those other letters. A foreclosure cannot be filed once the law goes into effect unless this Notice has been sent. We advise sending the "Grace Period Notice" in a separate envelope than the breach or demand letter.
The Notice must be formatted in a specific way: headed in 14-point type, entitled "GRACE PERIOD NOTICE" and including the date it was sent. The Notice must further state the following in 14-point type:
"YOUR LOAN IS MORE THAN 30 DAYS PAST DUE. YOU MAY BE EXPERIENCING FINANCIAL DIFFICULTY. IT MAY BE IN YOUR BEST INTEREST TO SEEK APPROVED HOUSING COUNSELING. YOU HAVE A GRACE PERIOD OF 30 DAYS FROM THE DATE OF THIS NOTICE TO OBTAIN APPROVED HOUSING COUNSELING. DURING THE GRACE PERIOD, THE LAW PROHIBITS US FROM TAKING ANY LEGAL ACTION AGAINST YOU. YOU MAY BE ENTITLED TO AN ADDITIONAL 30 DAY GRACE PERIOD IF YOU OBTAIN HOUSING COUNSELING FROM AN APPROVED HOUSING COUNSELING AGENCY. A LIST OF APPROVED COUNSELING AGENCIES MAY BE OBTAINED FROM THE ILLINOIS DEPARTMENT OF FINANCIAL AND PROFESSIONAL REGULATION."
No other language should be included in the body of the Notice, but it must also include the following information:
The consumer hotline number of the Illinois Department of Financial and Professional Regulation: 800-532-8785;
The web address of the Illinois Department of Financial and Professional Regulation: http//www.idfpr.com
A phone number for contacting the mortgagee;
A fax number for the mortgagee; and
The mailing address of the mortgagee.
The Notice must be sent via first class U.S. Mail and addressed to the borrower at the property address securing the loan.
Possible Second Thirty-Day Grace Period The law further imposes a second grace period that could extend the original grace period by up to an additional thirty days. If at any time during the above described thirty day original grace period, an approved counseling agency provides written notice to the mortgagee that the borrower is seeking counseling services, no foreclosure action may be initiated for thirty days after the date of the counseling agency notice. An approved counseling agency is defined as one that has been approved by the U.S. Department of Housing and Urban Development.
During this thirty-day period, it is expected that the mortgagee and counseling agency will work towards agreeing to a "sustainable loan workout plan." A "sustainable loan workout plan" may include, but is not limited to, the following:
Temporary suspension of payments;
Lengthened loan term;
A lowered or frozen interest rate;
A principal write down;
A repayment plan to pay the existing loan in full;
Deferred payments; or
Refinancing into a new affordable loan.
Effect of the Law Once the mortgagee sets up procedures to comply with this law, we do not expect it to result in substantial delays. If the "Grace Period Notice" is sent contemporaneously with the breach or default letter, the new thirty day grace period will be merged into an existing grace period that most mortgagees already have established with the breach letters.
However, since the law goes into effect immediately upon signing and since no new foreclosures can be filed without first complying with the required "Grace Period Notice," an expected thirty day delay will occur. This delay could be extended to a total of up to sixty days if the mortgagee receives notice that the borrower is working with an approved counseling agency.
Therefore, we urge you to begin sending the "Grade Period Notice" on each and every account that a breach or demand letter is sent to a borrower. Further, the "Grade Period Notice" should be mailed immediately on all accounts that have been referred for foreclosure so that there is no further delay beyond the thirty days required by the statute. These two steps will greatly minimize any further delays.
If you have any questions on this information, please contact Mr. Michael S. Bablo, Esq.
Michael is an associate in the Real Estate Default Group of the Chicago office focused on foreclosure services for Weltman, Weinberg & Reis Co., L.P.A. He can be reached at (312) 253-0617 or via e-mail at mbablo@weltman.com.
See Bill Entirety http://www.ilga.gov/legislation/95/SB/PDF/09500SB2513enr.pdf
SB 2513 applies to all loans secured by residential real property, except for those loans that the borrower has previously filed bankruptcy or which the property is not the borrower's principal residence.
SB 2513:
If a residential real property loan falls into default by more than thirty days, the mortgagee must send a "Grace Period Notice."
The law further imposes a second grace period that could extend the original grace period by up to an additional thirty days under certain circumstances.
The Governor of Illinois has officially signed Bill 2513 into law, which provides new requirements on lenders and servicers. The new requirements are effective immediately. Therefore, the new requirements must be adhered to beginning on April 6, 2009.
Applicable to Loans Secured by Borrower's Principal Residence OnlyThe law will apply to all loans secured by residential real property, except for those loans that the borrower has previously filed bankruptcy or which the property is not the borrower's principal residence. The law will apply only once per loan (i.e. if the law is complied with for a previous default, there is no requirement to comply with the law on any subsequent defaults).
Required Thirty Day "Grace Period Notice" If a residential real property loan falls into default by more than thirty days, the mortgagee must send a "Grace Period Notice." This Notice must be sent as a separate letter than any default or breach letter, but can be sent at the same time as those other letters. A foreclosure cannot be filed once the law goes into effect unless this Notice has been sent. We advise sending the "Grace Period Notice" in a separate envelope than the breach or demand letter.
The Notice must be formatted in a specific way: headed in 14-point type, entitled "GRACE PERIOD NOTICE" and including the date it was sent. The Notice must further state the following in 14-point type:
"YOUR LOAN IS MORE THAN 30 DAYS PAST DUE. YOU MAY BE EXPERIENCING FINANCIAL DIFFICULTY. IT MAY BE IN YOUR BEST INTEREST TO SEEK APPROVED HOUSING COUNSELING. YOU HAVE A GRACE PERIOD OF 30 DAYS FROM THE DATE OF THIS NOTICE TO OBTAIN APPROVED HOUSING COUNSELING. DURING THE GRACE PERIOD, THE LAW PROHIBITS US FROM TAKING ANY LEGAL ACTION AGAINST YOU. YOU MAY BE ENTITLED TO AN ADDITIONAL 30 DAY GRACE PERIOD IF YOU OBTAIN HOUSING COUNSELING FROM AN APPROVED HOUSING COUNSELING AGENCY. A LIST OF APPROVED COUNSELING AGENCIES MAY BE OBTAINED FROM THE ILLINOIS DEPARTMENT OF FINANCIAL AND PROFESSIONAL REGULATION."
No other language should be included in the body of the Notice, but it must also include the following information:
The consumer hotline number of the Illinois Department of Financial and Professional Regulation: 800-532-8785;
The web address of the Illinois Department of Financial and Professional Regulation: http//www.idfpr.com
A phone number for contacting the mortgagee;
A fax number for the mortgagee; and
The mailing address of the mortgagee.
The Notice must be sent via first class U.S. Mail and addressed to the borrower at the property address securing the loan.
Possible Second Thirty-Day Grace Period The law further imposes a second grace period that could extend the original grace period by up to an additional thirty days. If at any time during the above described thirty day original grace period, an approved counseling agency provides written notice to the mortgagee that the borrower is seeking counseling services, no foreclosure action may be initiated for thirty days after the date of the counseling agency notice. An approved counseling agency is defined as one that has been approved by the U.S. Department of Housing and Urban Development.
During this thirty-day period, it is expected that the mortgagee and counseling agency will work towards agreeing to a "sustainable loan workout plan." A "sustainable loan workout plan" may include, but is not limited to, the following:
Temporary suspension of payments;
Lengthened loan term;
A lowered or frozen interest rate;
A principal write down;
A repayment plan to pay the existing loan in full;
Deferred payments; or
Refinancing into a new affordable loan.
Effect of the Law Once the mortgagee sets up procedures to comply with this law, we do not expect it to result in substantial delays. If the "Grace Period Notice" is sent contemporaneously with the breach or default letter, the new thirty day grace period will be merged into an existing grace period that most mortgagees already have established with the breach letters.
However, since the law goes into effect immediately upon signing and since no new foreclosures can be filed without first complying with the required "Grace Period Notice," an expected thirty day delay will occur. This delay could be extended to a total of up to sixty days if the mortgagee receives notice that the borrower is working with an approved counseling agency.
Therefore, we urge you to begin sending the "Grade Period Notice" on each and every account that a breach or demand letter is sent to a borrower. Further, the "Grade Period Notice" should be mailed immediately on all accounts that have been referred for foreclosure so that there is no further delay beyond the thirty days required by the statute. These two steps will greatly minimize any further delays.
If you have any questions on this information, please contact Mr. Michael S. Bablo, Esq.
Michael is an associate in the Real Estate Default Group of the Chicago office focused on foreclosure services for Weltman, Weinberg & Reis Co., L.P.A. He can be reached at (312) 253-0617 or via e-mail at mbablo@weltman.com.
See Bill Entirety http://www.ilga.gov/legislation/95/SB/PDF/09500SB2513enr.pdf
Imported Chinese Drywall may have harmful materials EPA discusses
http://www.chinesedrywall.com/uploads/EPA_Analysis.pdf
The U.S. Environmental Protection Agency (EPA) confirmed Chinese drywall testing found that samples of wallboard imported from China between 2004 and 2008, contains certain potentially harmful chemicals that are not found in drywall manufactured in the United States.
To view the full EPA Analysis, please click on the following link:EPA Analysis As discussed below, the Senate Committee on Commerce, Science, and Transportation convened a subcommittee hearing on Health and Product Safety Issues Associated with Imported Drywall on Thursday, May 21, 2009.
To view a webcast of the Hearing, please click on the following link:Health and Product Safety Issues Associated with Imported Drywall
A request for $2 million in emergency funding failed to move forward in the U.S. Senate, however the Consumer Product Safety Commission and other federal agencies will continue investigating the potential effects of imported drywall.
The U.S. Environmental Protection Agency (EPA) confirmed Chinese drywall testing found that samples of wallboard imported from China between 2004 and 2008, contains certain potentially harmful chemicals that are not found in drywall manufactured in the United States.
To view the full EPA Analysis, please click on the following link:EPA Analysis As discussed below, the Senate Committee on Commerce, Science, and Transportation convened a subcommittee hearing on Health and Product Safety Issues Associated with Imported Drywall on Thursday, May 21, 2009.
To view a webcast of the Hearing, please click on the following link:Health and Product Safety Issues Associated with Imported Drywall
A request for $2 million in emergency funding failed to move forward in the U.S. Senate, however the Consumer Product Safety Commission and other federal agencies will continue investigating the potential effects of imported drywall.
Fannie Mae Upate on HAMP program and misc info
FHLMC Bulletin 2009-13
Wednesday, 27 May 2009
Freddie Mac has issued the following Single Family Seller/Servicer Guide Update regarding Bulletin 2009-13. With this Single-Family Advisory e-mail and today’s Single-Family Seller/Servicer Guide (Guide) Bulletin 2009-13, we are announcing multiple servicing updates, including:
Updates to Requirements for the Home Affordable Modification Program (HAMP)
Enhancements to Electronic Default Reporting (EDR) for all Mortgages that Have an Alternative to Foreclosure Being Pursued
Revisions to Servicer Performance Profile Default Management Weighting
Changes to Tier One Premium Awards
Revisions to Servicing Requirements
Information on Recent Treasury Announcements
Updates to Requirements for the Home Affordable Modification ProgramWith today’s Guide Bulletin, we are:
Requiring Servicers to solicit borrowers who are 31 days or more delinquent on or after July 1, 2009, by no later than the 50th day of delinquency; also providing additional guidance on borrower solicitation by phone or electronic means.
Permitting the collection of certain borrower loss mitigation information and documents electronically.
Providing additional guidance on the collection of Government Monitoring Data using the revised HAMP Hardship Affidavit that was posted on April 21, 2009.
Revising the requirements for reporting and remitting a payoff of a mortgage with a partial principal forbearance and revising the required monthly Spreadsheet for Reporting Mortgages with a Partial Principal Forbearance template.
Beginning June 1, 2009, Servicers may report a number of new EDR default action codes and a new default reason code that will become mandatory reporting as of October 1, 2009. Enhancements to Electronic Default Reporting for All Mortgages that Have an Alternative to Foreclosure Being PursuedWe are introducing new EDR default action codes in order for Servicers to provide us with information on mortgages they are pursuing an alternative to foreclosure. Some of the new EDR default action codes are specific to HAMP, while others apply to all mortgages, including current mortgages, for which the Servicer is pursuing an alternative to foreclosure. We are also adding the new default reason code “HMP” so Servicers can identify which loans that are in a Home Affordable Modification Trial Period. This new default reason code must be reported in conjunction with the “09-Forbearance” default action code. Servicers are required to use these new EDR codes beginning October 1, 2009. Guide Exhibit 82, Electronic Default Reporting Transmission Code List, has been updated to reflect these new codes and an updated version of the EDR Quick Reference Guide will be posted on the Learning Center by May 31, 2009.Revisions to Servicer Performance Profile Default Management WeightingUnprecedented market conditions and a crucial new role for Servicers in helping at-risk and delinquent borrowers through the Making Home Affordable program require changes to the Servicer Performance Profile. To maintain the Profile as a meaningful, accurate measurement and guide to continual improvement of servicing performance, we are adjusting the weighting of the Default Management metrics with your July 1, 2009, performance. The revised Default Management metrics will focus more on your loss mitigation, inventory management, and data integrity performance and less on collections management performance. Servicers will continue to be rated on the same Servicer Performance Profile weighting under Investor Reporting and Remitting.As the market continues to adjust this year, we will continue to evaluate the Servicer Performance Profile. If we find that the program warrants additional revisions, we’ll communicate those changes to you.Changes to Tier One Premium AwardsIn light of the current market conditions, with this Single-Family Advisory e-mail, we are discontinuing some of the incentives that correspond to the Tier One Premium Awards for all Servicers’ 2009 performance.
Effective immediately, we are no longer offering monetary performance incentives for Tier One Platinum, Tier One Gold, and Hall of Fame Servicers. In addition, both Tier One Platinum and Tier One Gold’s technology compensation will not be offered in 2009.
We will, however, continue to provide Tier One Platinum Servicers with a $10,000 non-monetary wavier to use toward EarlyIndicator® renewal fees or to acquire the tool and a $1,000 non-monetary waiver to use toward Freddie Mac training and events. Tier One Gold Servicers will also continue to receive a $500 non-monetary waiver to use toward Freddie Mac training classes and events. All Tier One waivers for transfer of servicing and database change fees will remain in effect.
We will not provide public promotion of the Tier One Premium Awards for 2008 and 2009 performance. We will, however, continue to notify you of your Tier One and Hall of Fame status through your servicing representative.
Our robust Workout Incentive Program, which is available to Servicers regardless of their Tier rating, remains available to help offset the costs of pursuing alternatives to foreclosure. Servicers will continue to receive monetary incentives, depending on the type of successful workout, in accordance to the Guide.
As we are with the Servicer Performance Profile, we will continue to evaluate the Tier One Premium Awards throughout the year. If the program requires updates, we’ll communicate those changes to you. Revisions to Servicing RequirementsWith today’s Guide Bulletin, we are also:
Updating the Loss Mitigation Transmittal Worksheet to include data elements specific to HAMP and incorporating it into the Guide as new Form 1128, which is now an interactive Microsoft® Excel spreadsheet.
Updating Guide Chapter B65 to reflect that a HAMP-eligible borrower must first be considered under Guide Chapter C65. Servicers must implement the requirements for HAMP and also directs them to consider borrowers who are in a 0 to 30 day delinquency status to first be considered for a Freddie Mac Relief Refinance MortgageSM under Guide Chapter 24. If the borrower is not eligible for a modification under HAMP, the Servicer must then consider the borrower for other alternative to foreclosure options outlined in Guide Chapter B65.
Announcing new, standardized form subordination agreements, which were developed by Freddie Mac and Fannie Mae in coordination with the American Land Title Association. These standard form agreements are designed for lenders and Servicers to use to resubordinate subordinate liens when working with borrowers on modifications or refinances, including loan modifications under HAMP and Freddie Mac Relief Refinance Mortgages. The new agreements will be available on our Uniform Instruments Web page by June 1. Information on Recent Treasury AnnouncementsThe U.S. Department of the Treasury recently announced that they are expanding HAMP to include requirements on the use of short sales and deeds-in-lieu of foreclosure in the event a borrower cannot complete the modification process. They also announced a second lien program to help struggling borrowers lower their monthly payments on their second mortgage. We are currently working through the policy and operational guidelines, and we will communicate any necessary changes to our requirements in a future Guide Bulletin.
Wednesday, 27 May 2009
Freddie Mac has issued the following Single Family Seller/Servicer Guide Update regarding Bulletin 2009-13. With this Single-Family Advisory e-mail and today’s Single-Family Seller/Servicer Guide (Guide) Bulletin 2009-13, we are announcing multiple servicing updates, including:
Updates to Requirements for the Home Affordable Modification Program (HAMP)
Enhancements to Electronic Default Reporting (EDR) for all Mortgages that Have an Alternative to Foreclosure Being Pursued
Revisions to Servicer Performance Profile Default Management Weighting
Changes to Tier One Premium Awards
Revisions to Servicing Requirements
Information on Recent Treasury Announcements
Updates to Requirements for the Home Affordable Modification ProgramWith today’s Guide Bulletin, we are:
Requiring Servicers to solicit borrowers who are 31 days or more delinquent on or after July 1, 2009, by no later than the 50th day of delinquency; also providing additional guidance on borrower solicitation by phone or electronic means.
Permitting the collection of certain borrower loss mitigation information and documents electronically.
Providing additional guidance on the collection of Government Monitoring Data using the revised HAMP Hardship Affidavit that was posted on April 21, 2009.
Revising the requirements for reporting and remitting a payoff of a mortgage with a partial principal forbearance and revising the required monthly Spreadsheet for Reporting Mortgages with a Partial Principal Forbearance template.
Beginning June 1, 2009, Servicers may report a number of new EDR default action codes and a new default reason code that will become mandatory reporting as of October 1, 2009. Enhancements to Electronic Default Reporting for All Mortgages that Have an Alternative to Foreclosure Being PursuedWe are introducing new EDR default action codes in order for Servicers to provide us with information on mortgages they are pursuing an alternative to foreclosure. Some of the new EDR default action codes are specific to HAMP, while others apply to all mortgages, including current mortgages, for which the Servicer is pursuing an alternative to foreclosure. We are also adding the new default reason code “HMP” so Servicers can identify which loans that are in a Home Affordable Modification Trial Period. This new default reason code must be reported in conjunction with the “09-Forbearance” default action code. Servicers are required to use these new EDR codes beginning October 1, 2009. Guide Exhibit 82, Electronic Default Reporting Transmission Code List, has been updated to reflect these new codes and an updated version of the EDR Quick Reference Guide will be posted on the Learning Center by May 31, 2009.Revisions to Servicer Performance Profile Default Management WeightingUnprecedented market conditions and a crucial new role for Servicers in helping at-risk and delinquent borrowers through the Making Home Affordable program require changes to the Servicer Performance Profile. To maintain the Profile as a meaningful, accurate measurement and guide to continual improvement of servicing performance, we are adjusting the weighting of the Default Management metrics with your July 1, 2009, performance. The revised Default Management metrics will focus more on your loss mitigation, inventory management, and data integrity performance and less on collections management performance. Servicers will continue to be rated on the same Servicer Performance Profile weighting under Investor Reporting and Remitting.As the market continues to adjust this year, we will continue to evaluate the Servicer Performance Profile. If we find that the program warrants additional revisions, we’ll communicate those changes to you.Changes to Tier One Premium AwardsIn light of the current market conditions, with this Single-Family Advisory e-mail, we are discontinuing some of the incentives that correspond to the Tier One Premium Awards for all Servicers’ 2009 performance.
Effective immediately, we are no longer offering monetary performance incentives for Tier One Platinum, Tier One Gold, and Hall of Fame Servicers. In addition, both Tier One Platinum and Tier One Gold’s technology compensation will not be offered in 2009.
We will, however, continue to provide Tier One Platinum Servicers with a $10,000 non-monetary wavier to use toward EarlyIndicator® renewal fees or to acquire the tool and a $1,000 non-monetary waiver to use toward Freddie Mac training and events. Tier One Gold Servicers will also continue to receive a $500 non-monetary waiver to use toward Freddie Mac training classes and events. All Tier One waivers for transfer of servicing and database change fees will remain in effect.
We will not provide public promotion of the Tier One Premium Awards for 2008 and 2009 performance. We will, however, continue to notify you of your Tier One and Hall of Fame status through your servicing representative.
Our robust Workout Incentive Program, which is available to Servicers regardless of their Tier rating, remains available to help offset the costs of pursuing alternatives to foreclosure. Servicers will continue to receive monetary incentives, depending on the type of successful workout, in accordance to the Guide.
As we are with the Servicer Performance Profile, we will continue to evaluate the Tier One Premium Awards throughout the year. If the program requires updates, we’ll communicate those changes to you. Revisions to Servicing RequirementsWith today’s Guide Bulletin, we are also:
Updating the Loss Mitigation Transmittal Worksheet to include data elements specific to HAMP and incorporating it into the Guide as new Form 1128, which is now an interactive Microsoft® Excel spreadsheet.
Updating Guide Chapter B65 to reflect that a HAMP-eligible borrower must first be considered under Guide Chapter C65. Servicers must implement the requirements for HAMP and also directs them to consider borrowers who are in a 0 to 30 day delinquency status to first be considered for a Freddie Mac Relief Refinance MortgageSM under Guide Chapter 24. If the borrower is not eligible for a modification under HAMP, the Servicer must then consider the borrower for other alternative to foreclosure options outlined in Guide Chapter B65.
Announcing new, standardized form subordination agreements, which were developed by Freddie Mac and Fannie Mae in coordination with the American Land Title Association. These standard form agreements are designed for lenders and Servicers to use to resubordinate subordinate liens when working with borrowers on modifications or refinances, including loan modifications under HAMP and Freddie Mac Relief Refinance Mortgages. The new agreements will be available on our Uniform Instruments Web page by June 1. Information on Recent Treasury AnnouncementsThe U.S. Department of the Treasury recently announced that they are expanding HAMP to include requirements on the use of short sales and deeds-in-lieu of foreclosure in the event a borrower cannot complete the modification process. They also announced a second lien program to help struggling borrowers lower their monthly payments on their second mortgage. We are currently working through the policy and operational guidelines, and we will communicate any necessary changes to our requirements in a future Guide Bulletin.
Wednesday, May 6, 2009
Final Score: $8,000 for Homebuyers
Les Christie, CNNMoney.com staff writer
There's a nice windfall for some homebuyers in the economic stimulus bill. First-time buyers can claim a credit worth $8,000 - or 10% of the home's value, whichever is less - on their 2008 or 2009 taxes.
A big plus is that the credit is refundable, meaning tax filers see a refund of the full $8,000 even if their total tax bill - the amount of withholding they paid during the year plus anything extra they had to pony up when they filed their returns - was less than that amount. But there has been a lot of confusion over this provision. Adam Billings of Knoxville, Tenn. wrote to CNNMoney.com asking:
“I will qualify as a first-time home buyer, and I am currently set to get a small tax refund for 2008. Does that mean if I purchased now that I would get an extra $8,000 added on top of my current refund?”
The short answer? Yes, Billings would get back the $8,000 plus what he'd overpaid. The long answer? It depends. Here are three scenarios:
Scenario 1: Your final tax liability is normally $6,000. You've had taxes withheld from every paycheck and at the end of the year you've paid Uncle Sam $6,000. Since you've already paid him all you owe, you get the entire $8,000 tax credit as a refund check.
Scenario 2: Your final tax liability is $6,000, but you've overpaid by $1,000 through your payroll withholding. Normally you would get a $1,000 refund check. In this scenario, you get $9,000, the $8,000 credit plus the $1,000 you overpaid.
Scenario 3: Your final tax liability is $6,000, but you've underpaid through your payroll withholding by $1,000. Normally, you would have to write the IRS a $1,000 check. This time, the first $1,000 of the tax credit pays your bill, and you get the remaining $7,000 as a refund.
To qualify for the credit, the purchase must be made between Jan. 1, 2009 and Nov. 30, 2009. Buyers may not have owned a home for the past three years to qualify as “first time” buyer. They must also live in the house for at least three years, or they will be obligated to pay back the credit.
Additionally, there are income restrictions: To qualify, buyers must make less than $75,000 for singles or $150,000 for couples. (Higher-income buyers may receive a partial credit.)
Applying for the credit will be easy - or at least as easy as doing your income taxes. Just claim it on your return. No other forms or papers have to be filed. Taxpayers who have already completed their returns can file amended returns for 2008 to claim the credit.
Lukewarm receptionThe housing industry is somewhat pleased with the result because the stimulus plan improves on the current $7,500 tax credit, which was passed in July and was more of a low-interest loan than an actual credit. But the industry was also disappointed that Congress did not go even further and adopt the Senate's proposal of a $15,000 non-refundable credit for all homebuyers.
“[The Senate version] would have done a lot more to turn around the housing market,” said Bernard Markstein, an economist and director of forecasting for the National Association of Homebuilders (NAHB). “We have a lot of reports of people who would be coming off the fence because of it.”
Even so, the $8,000 credit will bring an additional 300,000 new homebuyers into the market, according to estimates by Lawrence Yun, chief economist for the National Association of Realtors.
The credit could also create a domino effect, he said, because each first-time homebuyer sale will lead to two more trade-up transactions down the line. “I think there are many homeowners who would be trading-up but they have had no buyers for their own homes,” Yun said.
Who won't benefit, according to Mark Goldman, a real estate lecturer at San Diego State University, are those first-time homebuyers struggling to come up with down payments. The credit does not help get them over that hurdle - they still have to close the sale before claiming the bonus.
One state, Missouri, is trying to get around that problem by creating a short-term loan on the tax credit of up to $6,750. The state would loan borrowers the money so they could use it at closing as part of the down payment. Then, when the buyers receive their tax credit from the IRS, they pay back the state. Other states may follow with similar programs, according to NAHB's Dietz.
Many may look at the tax credit as a discount on the home price, according to Yun. A $100,000 purchase effectively becomes a $92,000 one. That can reassure buyers apprehensive about purchasing and then watching prices continue falling, he added.
And it provides a nice nest egg for the often-difficult early years of homeownership, when unexpected repairs and expenses often crop up. Recipients could also use the money to buy new stuff for their home - a lawnmower, a rug, a sofa - and, in that way, help stimulate the economy.
Reprint courtesy of CNNMoney.com
There's a nice windfall for some homebuyers in the economic stimulus bill. First-time buyers can claim a credit worth $8,000 - or 10% of the home's value, whichever is less - on their 2008 or 2009 taxes.
A big plus is that the credit is refundable, meaning tax filers see a refund of the full $8,000 even if their total tax bill - the amount of withholding they paid during the year plus anything extra they had to pony up when they filed their returns - was less than that amount. But there has been a lot of confusion over this provision. Adam Billings of Knoxville, Tenn. wrote to CNNMoney.com asking:
“I will qualify as a first-time home buyer, and I am currently set to get a small tax refund for 2008. Does that mean if I purchased now that I would get an extra $8,000 added on top of my current refund?”
The short answer? Yes, Billings would get back the $8,000 plus what he'd overpaid. The long answer? It depends. Here are three scenarios:
Scenario 1: Your final tax liability is normally $6,000. You've had taxes withheld from every paycheck and at the end of the year you've paid Uncle Sam $6,000. Since you've already paid him all you owe, you get the entire $8,000 tax credit as a refund check.
Scenario 2: Your final tax liability is $6,000, but you've overpaid by $1,000 through your payroll withholding. Normally you would get a $1,000 refund check. In this scenario, you get $9,000, the $8,000 credit plus the $1,000 you overpaid.
Scenario 3: Your final tax liability is $6,000, but you've underpaid through your payroll withholding by $1,000. Normally, you would have to write the IRS a $1,000 check. This time, the first $1,000 of the tax credit pays your bill, and you get the remaining $7,000 as a refund.
To qualify for the credit, the purchase must be made between Jan. 1, 2009 and Nov. 30, 2009. Buyers may not have owned a home for the past three years to qualify as “first time” buyer. They must also live in the house for at least three years, or they will be obligated to pay back the credit.
Additionally, there are income restrictions: To qualify, buyers must make less than $75,000 for singles or $150,000 for couples. (Higher-income buyers may receive a partial credit.)
Applying for the credit will be easy - or at least as easy as doing your income taxes. Just claim it on your return. No other forms or papers have to be filed. Taxpayers who have already completed their returns can file amended returns for 2008 to claim the credit.
Lukewarm receptionThe housing industry is somewhat pleased with the result because the stimulus plan improves on the current $7,500 tax credit, which was passed in July and was more of a low-interest loan than an actual credit. But the industry was also disappointed that Congress did not go even further and adopt the Senate's proposal of a $15,000 non-refundable credit for all homebuyers.
“[The Senate version] would have done a lot more to turn around the housing market,” said Bernard Markstein, an economist and director of forecasting for the National Association of Homebuilders (NAHB). “We have a lot of reports of people who would be coming off the fence because of it.”
Even so, the $8,000 credit will bring an additional 300,000 new homebuyers into the market, according to estimates by Lawrence Yun, chief economist for the National Association of Realtors.
The credit could also create a domino effect, he said, because each first-time homebuyer sale will lead to two more trade-up transactions down the line. “I think there are many homeowners who would be trading-up but they have had no buyers for their own homes,” Yun said.
Who won't benefit, according to Mark Goldman, a real estate lecturer at San Diego State University, are those first-time homebuyers struggling to come up with down payments. The credit does not help get them over that hurdle - they still have to close the sale before claiming the bonus.
One state, Missouri, is trying to get around that problem by creating a short-term loan on the tax credit of up to $6,750. The state would loan borrowers the money so they could use it at closing as part of the down payment. Then, when the buyers receive their tax credit from the IRS, they pay back the state. Other states may follow with similar programs, according to NAHB's Dietz.
Many may look at the tax credit as a discount on the home price, according to Yun. A $100,000 purchase effectively becomes a $92,000 one. That can reassure buyers apprehensive about purchasing and then watching prices continue falling, he added.
And it provides a nice nest egg for the often-difficult early years of homeownership, when unexpected repairs and expenses often crop up. Recipients could also use the money to buy new stuff for their home - a lawnmower, a rug, a sofa - and, in that way, help stimulate the economy.
Reprint courtesy of CNNMoney.com
Monday, May 4, 2009
Wachovia asks REALTORS to help with Short Sales
Distressed homeowners with Wachovia, formerly World Savings, as a lender are seeing a glimmer of home when it comes to saving their homes from foreclosure.
Unlike other banks, Wachovia has short sale managers in the field to talk to distressed homeowners and help them explore options before going to foreclosure. The process is simple and straight forward for the homeowner.
The Wachovia Short Sale manager meets with the homeowner to determine that there is truly a hardship. The seller may be asked to provide a financial statement as well as other information such as tax returns. The Short Sale Manager assess the situation, orders a Brokers Professional Opinion, and then is able to approve the hardship in just a matter of days. Of course if there is a chance that the seller may qualify for a loan modification, that is also an option.
This does several things for the distressed homeowner:
It gives them piece of mind knowing that they are dealing with their lender directly and not some third party collection team;
It gives them faith in their Realtor, and the industry, by seeing the two entities work together to provide help and assistance;
It stops the foreclosure process and takes away the burden and the embarrassment of a foreclosure;
It expedites the short sale process into a period of weeks, as opposed to months, allowing the homeowner to move on with their lives;
It allows the homeowner to reestablish credit faster than if they had to go to through the foreclosure process.
This also helps Wachovia:
Wachovia's short sale managers are a great public relations team for Wachovia to the industry, and to distressed homeowners;
It ultimately saves Wachovia time and money by properly pricing the home and determining the hardship from the start - as opposed to the extended process, which results in a greater loss, especially in a declining market.
Wachovia should be applauded for their efforts and held up as an example for other financial institutions. Working together only helps the distressed homeowner and our industry.
Currently have a World Savings, Wachovia, Golden West, Home Loan and your property is upside down. You would like to List your property than please contact me today.
Unlike other banks, Wachovia has short sale managers in the field to talk to distressed homeowners and help them explore options before going to foreclosure. The process is simple and straight forward for the homeowner.
The Wachovia Short Sale manager meets with the homeowner to determine that there is truly a hardship. The seller may be asked to provide a financial statement as well as other information such as tax returns. The Short Sale Manager assess the situation, orders a Brokers Professional Opinion, and then is able to approve the hardship in just a matter of days. Of course if there is a chance that the seller may qualify for a loan modification, that is also an option.
This does several things for the distressed homeowner:
It gives them piece of mind knowing that they are dealing with their lender directly and not some third party collection team;
It gives them faith in their Realtor, and the industry, by seeing the two entities work together to provide help and assistance;
It stops the foreclosure process and takes away the burden and the embarrassment of a foreclosure;
It expedites the short sale process into a period of weeks, as opposed to months, allowing the homeowner to move on with their lives;
It allows the homeowner to reestablish credit faster than if they had to go to through the foreclosure process.
This also helps Wachovia:
Wachovia's short sale managers are a great public relations team for Wachovia to the industry, and to distressed homeowners;
It ultimately saves Wachovia time and money by properly pricing the home and determining the hardship from the start - as opposed to the extended process, which results in a greater loss, especially in a declining market.
Wachovia should be applauded for their efforts and held up as an example for other financial institutions. Working together only helps the distressed homeowner and our industry.
Currently have a World Savings, Wachovia, Golden West, Home Loan and your property is upside down. You would like to List your property than please contact me today.
Friday, May 1, 2009
Sacramento Road Closures UPDATED TODAY
Click here to see if your effected by the current road closures in Sacramento, CA. http://www.msa.saccounty.net/Roads/default.asp
Multiple Locations (See Details for Street Names)
April 13 to June 227:30 AM to 4:30 PM
Lane ClosureThere will be multlple lane closures keeping at least one lane open in each direction at all times. Streets affected are: Dudley Blvd from Howard Street to Freedom Park; Watt Avenue to Price Avenue on James Street; Watt Avenue to Luce Avenue on Palm Avenue; Watt Avenue to Luce Avenue on Peacekeeper; Dudley Blvd./ James Way Intersection; Arnold Way from James Street to Howard Street; Dudley Blvd/Peacekeeper Way Intersection; Dudley Blvd/Palm Street Intersection. REASON FOR CLOSURES: ADA Ramp replacement, paving and Slurry seal. DISTRICT:1
For more road construction projects in your area or road clsures please click on the link above.
Multiple Locations (See Details for Street Names)
April 13 to June 227:30 AM to 4:30 PM
Lane ClosureThere will be multlple lane closures keeping at least one lane open in each direction at all times. Streets affected are: Dudley Blvd from Howard Street to Freedom Park; Watt Avenue to Price Avenue on James Street; Watt Avenue to Luce Avenue on Palm Avenue; Watt Avenue to Luce Avenue on Peacekeeper; Dudley Blvd./ James Way Intersection; Arnold Way from James Street to Howard Street; Dudley Blvd/Peacekeeper Way Intersection; Dudley Blvd/Palm Street Intersection. REASON FOR CLOSURES: ADA Ramp replacement, paving and Slurry seal. DISTRICT:1
For more road construction projects in your area or road clsures please click on the link above.
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