VALUE NO LONGER AN ISSUE ON CONFORMING REFINANCES
Whether you like his policies or not, if you are a home owner, you will likely want to take advantage of the new revisions President Obama recently made on the HARP Program.
The HARP program initially allowed homeowners to refinance up to 125% of the home’s current value. In States like Arizona, Florida, and Nevada, 125% was not enough, as most homeowners owe considerably more than 125% of the value of their home.
Next month, loan to value (LTV) will no longer be a factor. Under the new HARP guidelines, the loan to value “cap” has been removed. Regardless of the home’s value, homeowners that meet the revised guidelines will finally be able to take advantage of the low interest rates. Example: House is worth $150K, but you owe $250K, no longer an issue.
Important guideline highlights:
- No late payments in the last 6 months and no more than one late payment in the last 12 months.
- Loan must be guaranteed by Fannie Mae or Freddie Mac.
- No cash out.
- If there is a 2nd mortgage, 2nd mortgage lender must agree to subordinate.
- Loan must have been originated prior to May 31st, 2009.
- The interest rates are based on credit and loan to value.
The HARP revisions go into effect as early as November 15th, 2011, but may take a few weeks for lenders to implement.
Please contact me if you want to see if you can take advantage of the newly revised HARP program. (christiller@brett-tanner.com) 602-561-1346
FOREIGNERS WELCOME BUT ONLY IF YOU BUY A HOUSE
Senators Charles Schumer and Mike Lee introduced a bill this month that would allow foreign investors who invest at least $500,000 in U.S. real estate to obtain a three year visa. One stipulation is that at least half of the investment must be spent on a primary residence and the investor must live there at least 180 days and pay taxes.
Foreigners bought the housing debt we didn’t want, so why not sell them the actual real estate.
“Foreigners spent $82 billion buying up U.S. homes in the 12 months ended in March, up 24% from a year earlier.” (NAR)
FED CONSPIRACY OR JUST THE TRUTH
The Government Accountability Office made formal recommendations to the Federal Reserve board of directors to reform its reputation for holding severe conflicts of interest. The GAO found that although the Fed manages potential conflicts of interest, stronger and more transparent rules should be installed to prevent the appearance of some directors taking advantage of their Fed status. For instance, 18 former and current members of the Fed board were affiliated with banks and other companies that received emergency loans from the central bank during the financial crisis.
JPMorgan Chase CEO Jamie Dimon served on the Federal Reserve Bank of New Yorkboard at the same time Chase received these loans from the Fed. In March 2008, the Fed also provided Chase $30 billion in financing to purchase Bear Stearns. Dimon was able to persuade the Fed to grant his bank an 18-month exemption from risk-based leverage and capital requirements, the GAO said. The central bank also took on troubled mortgage assets off the Bear Stearns balance sheet before the acquisition.
Potential conflicts of interest ran the other way as well. At the end of 2008, the New York Fed approved Goldman Sachs as a bank holding company, providing access to bargain loans from the reserve. Stephen Friedman, then chairman of the New York Fed, also sat on the board of directors at Goldman and even owned shares of Goldman stock, which was prohibited by conflict of interest regulations, the GAO said.
Additionally, the GAO said the Fed should urge its group of regional banks to consider how to broaden pools of potential candidates. Officers below the senior executive level should be included, the agency said, in order to diversify their boards. For instance, of the 108 members making up the nine-member boards at the 12 regional Fed banks, 78 were white men, elected by banks to represent their interests. (cnnfn.com)
A PLAN TO REFORM HOUSING
The Progressive Policy Institute is devising a plan to reform housing and roll back Fannie Mae’s and Freddie Mac’s near monopoly on home loan financing.
The Progressive Policy Institute has proposed a five part plan:
- Do no harm: PPI warned against a qualified residential mortgage definition in Dodd-Frank that would mandate a 20% down payment. It recommended restoring the conforming loan limits that expired Oct. 1.
- Throw a lifeline to underwater borrowers: The paper recommends encouraging lenders to write down loans in exchange for a share in future appreciation and a mass refinance of GSE portfolio loans to lower rates, a topic under consideration now by the Obama administration.
- Soak up supply by sparking new demand: A $5,000 permanent homebuyer tax credit would help low- to moderate-income families. It would require a dollar-for-dollar match by the homebuyer. The "HomeK" account would allow employees to segregate up to 50% of their retirement account into a housing specific sub account. Funds could be withdrawn without penalty and applied toward a down payment. The authors also support a bulk REO-to-rental program and "homeownership vouchers" that would be targeted toward lower-income, first-time buyers.
- Fix Fannie and Freddie sooner rather than later.
- Articulate a new national housing policy: For the last 30 years, housing policy has been driven primarily by the homeownership rate. That thinking needs to be broadened, according to the PPI paper.
(Content: Housingwire.com)
The Brett Tanner Team
Keller Williams Realty
4862 E. Baseline Road #103
Mesa, AZ 85206
Phone: 602-561-1346
Fax: 1-888-292-0678
Website: www.phxrealty.com
Blog: http://tillersreupdate.blogspot.com/
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