Welcome to the "Z" Team!

More than 30,000 California families will face higher down payments, higher mortgage rates, and stricter loan qualification requirements if conforming loan limits on mortgages backed by the Federal Housing Administration (FHA), Fannie Mae, and Freddie Mac are reduced beginning October 1, 2011, according to analysis by C.A.R.

Barring congressional action, the maximum FHA, Fannie Mae, and Freddie Mac conforming loan limit will decline to $625,500 beginning Oct. 1, 2011, from the current $729,750 limit, though the majority of counties will fall far below the $625,500 maximum.  The conforming loan limit determines the maximum size of a mortgage that FHA, Fannie Mae, and Freddie Mac government-sponsored enterprises (GSEs) can buy or guarantee.  Non-conforming or jumbo loans typically carry a higher mortgage interest rate than a conforming loan and require a higher down payment, increasing the monthly payment and negatively impacting housing affordability for California home buyers.

C.A.R. and NAR have long advocated making higher conforming loan limits permanent.  As a result of C.A.R.’s and NAR’s efforts, in 2008, Congress temporarily raised the conforming loan limits from $417,000 to $729,750 and has extended them annually through fiscal year 2011.

To view charts showing how the changes would impact various areas throughout California, visit: http://www.car.org/newsstand/newsreleases/2011newsreleases/loanlimits/ 

Other articles relating to the Sacramento and Placerville, California regions at: www.sierraproperties.com

Mortgage servicers who have delayed the foreclosure process for delinquent borrowers may now get fined. Fannie Mae announced it will retroactively fine mortgage servicers for failing to process severely aged loans in foreclosure, HousingWire reports.

Fannie Mae would not disclose the amount of the fees, but the fees are to be “based on the outstanding principal balance of the mortgage loan, the applicable pass-through rate, the length of the delay, and any additional costs,” HousingWire reports.

The government-sponsored enterprise updated its time frames for mortgage servicers for navigating the foreclosure process last August.

“A compensatory fee not only compensates Fannie Mae for damages but also emphasizes the importance placed on a particular aspect of the servicer’s performance,” according to guidance for Fannie Mae from its regulator, the Federal Housing Finance Agency. “In some cases, a compensatory fee will relate to the action the servicer took, or failed to take, in handling a specific mortgage loan. At other times, the compensatory fee reflects the impact of the servicer’s performance deficiencies on Fannie Mae’s cash flow.”

Source: “Fannie Mae to Retroactively Charge Mortgage Servicers for Foreclosure Delays,” HousingWire (June 28, 2011) 

Other articles relating to the Sacramento and Placerville, California regions at: www.sierraproperties.com

“The Deed for Lease Program provides an additional option for qualifying homeowners who are facing foreclosure and are not eligible for modifications,” said Jay Ryan, Vice President of Fannie Mae. “This new program helps eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period, and helps to stabilize neighborhoods and communities.”

Leases under the new program may be up to 12 months, with the possibility of term renewal or month-to-month extensions after that period. For additional information about the Deed for Lease Program, including full details on program eligibility, please review the Guide Announcement on www.efanniemae.com.

Sounds like an admirable and helpful concept for many families facing foreclosure. However, if the feds are becoming a “National Landlord”, will their next step be renting all the vacant homes they own from foreclosures? That competition with the private sector of landlords and investors who own rental properties would be an interesting dilemma! 

How do job losses correlate to economic recovery? 

The “next round” of foreclosures, now beginning? 

Are delinquent loans being helped by congressional actions? 

JOB losses are the primary causes for foreclosures. A huge number of adjustable-rate loans of “prime” (not subprime) borrowers is now beginning to “reset to higher loan payments”. Many of these are job holders of “White Collar Workers” facing or already unemployed. Therefore, future monthly record delinquency rates are likely, until the right answers are discovered by Congress. 

Government “Fix” programs are not making a dent in resolving the real problems. “Loan modifications”, one of the pipe dreams, is one of the classic examples. Home owners who want to pursue affordable payments and conditions believed available seek this choice. Months later, they are waiting for approval but find out the lender foreclosed. 

Other options considered also typically encounter chaos, frustration endless delays or no responses! Foreclosures add thousands of dollars to the lenders losses. Typically, when they get the home back, it may be worth half the original loan amount. Plus, the borrower often remains in the home for over a year, not making payments. (Good for them!) 

Obviously, jobs must be retained and created! Additionally, let’s face reality. Unemployment nationwide for many months has not been under 10%. True unemployment is at least 20% when including the “self employed and independent contractors” who are not entitled to unemployment benefits!

Behind on monthly payments?

What information and options are available?

How could your “credit scores” be impacted?

The “Homeownership Preservation Foundation” is an excellent FREE resource. Their website www.995hope.org offers a diversified amount information and solutions for your alternatives. Whether you’re in your in Placerville or any part of the USA, this will help. Online counseling, videos and other educational resources cover about any scenario.

Contact your lender to see what kind of advise or assistance they may offer. Many are beginning to have customer service or mediation departments. This will not be a quick or easy process so, be patient. Keep notes, names and phone numbers.

Professional counselors can be helpful but check their experience and expertise. Be cautious, there are a lot of scammers out their, so do not pay up front fees.

Here’s the likely options you may consider and how will your “credit scores” be affected:

“Loan Modifications” depending on the exact conditions of changes may not have much impact. This is an excellent choice if you want to keep your home.

“Short sales” according to research, can reduce your credit scores by as much as 130 points.

“Foreclosure” can cause a fall of 200 points or more. Negative marks on credit bureau files may last 5 to 7 years.

“Bankruptcy filings” on the average drop you scores around 300 points and reflect on credit bureau files for 10 years.

Cap and Trade passed the House. Now the Senate is working on their version of the Waxman-Markey bill. It appears the final result may include a new “National Building Code”. Homes would have to undergo and pass an “environmental inspection” when sold.

Mandated compliance of these new energy efficiency standards would make selling more expensive and difficult. Older homes and fixer uppers could represent cost prohibitive situations for sellers. Buyers would lose an opportunity to remodel, repair or upgrade with their options and desires. 

Obvious other ramifications from this will only further delay economic recovery. Other government regulations forced on home sales and the loan industry  this year,  have already had  negative impacts. The “American Dream of Home Ownership” is only being contradicted by much of this legislation.