Closing Timelines and 2009 Federal Regulations

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Consumer protection regulations have been put in place to ensure that homebuyers receive better information, especially regarding cost disclosures, earlier in the mortgage process.

New Truth in Lending disclosure requirements take effect July 30, 2009 and the timing of your closings may be impacted. With the new regulations you may need to plan for at least a 30-day close if the homebuyer is financing the property. [Read more...]

Making Home Affordable – Foreclosure Alternatives and Home Price Decline Protection Incentives

On Feb.18th the Obama Administration announced the Making Home Affordable (MHA) Program, a comprehensive plan to stabilize the US housing market and offer assistance to up to 7 to 9 million homeowners by reducing mortgage payments to affordable levels and preventing avoidable foreclosures. [Read more...]

Debt to Income Ratio Calculator – How much home can you afford?

We have created two different versions of the Debt-to-Income (DTI) Ratio worksheets. The DTI ratio is used by lenders to determine how much mortgage payment a buyer can comfortably afford. In the past, lenders moved away from these ratios but lenders have decided to use them again.

We have two pdf forms you can use.

1) Debt-to-Income Ratio – Auto Calc -This pdf form allows you to enter in your income and expenses and it does the math calculations for you. It takes 15 seconds.

2) Debt-to-Income Ratio Worksheet – In case your version of adobe does not support the above form, you can use this one with your calculator to figure out the loan payment that will work for you.

After you find out the loan payment you can afford, use our mortgage calculator to see how much mortgage and house that can buy! CLICK HERE

Call us if you have any questions. In 15 minutes we can put you on the right track.

Steve Kornspan

Administration Launches New Consumer Website For Responsible Homeowners Seeking Relief

March 19, 2009

Administration Launches New Consumer Website For Responsible Homeowners Seeking Relief

MakingHomeAffordable.gov Features Self Assessment Tools, Calculators 
to Help Borrowers Determine Eligibility, Payment Reductions 
under Administration’s Refinancing and Loan Modification Program

 

Washington, DC– The U.S. Department of the Treasury and the Department of Housing and Urban Development (HUD) today launched a new website for consumers seeking information about the Obama Administration’s Making Home Affordable loan modification and refinancing program. MakingHomeAffordable.gov offers features including interactive self-assessment tools that will empower borrowers to determine if they’re eligible to participate and calculate the monthly mortgage payment reductions they could stand to realize under the Making Home Affordable program.

First announced by President Barack Obama in February, Making Home Affordable will offer assistance to as many as 7 to 9 million homeowners making a good-faith effort to make their mortgage payments, while attempting to prevent the destructive impact of the housing crisis on families and communities. MakingHomeAffordable.gov is a joint effort of the Department of the Treasury and HUD.

“Education and outreach is central to the success of our Making Home Affordable program,” said Treasury Secretary Tim Geithner.  “Putting resources and tools directly in the hands of homeowners will expedite the process of delivering relief to responsible borrowers, and stabilizing the housing market is central to our overall economic recovery.”

“The tools offered on this site will help American families access the help they need even faster,” said HUD Secretary Shaun Donovan. “Communicating how this program works and who is eligible to those who need it is critical to the program’s success, and this website does just that.”

Since releasing the guidelines to enable servicers to begin modifications of eligible mortgages under Making Home Affordable on March 4th, representatives from Treasury, HUD and other members of a broad interagency task force have conducted detailed briefings and training sessions for mortgage loan servicers and investors, nonprofit housing counselors and nationwide borrower advocacy groups.  Through these early and aggressive efforts to arm those interacting directly with borrowers with information, interagency representatives have briefed more than 2,500 participants on the Administration’s plans in the last two weeks. 

A wide array of large banks to small lenders have already agreed to participate in Making Home Affordable, and servicers have undertaken steps to proactively engage borrowers and respond to their inquiries related to the new program. For example, JP Morgan Chase has put several special tools into place and initiated proactive solicitations to eligible borrowers around the Making Home Affordable program, including an online site to provide program details and allow borrowers to download a new financial information package; increased staffing in a dedicated service center that provides simple entry point for all borrowers, including CHASE, heritage Washington Mutual and EMC; a partnership with Fannie Mae to solicit over 125,000 eligible borrowers; and solicitation to an additional 180,000 non-GSE eligible borrowers.

With those wheels in motion, the Administration is now accelerating efforts to communicate directly with borrowers about the Making Home Affordable program. Features of the MakingHomeAffordable.gov website launched today include:

  • Extensive information about the Administration’s Making Home Affordable plan
  • Self assessment tools to allow borrowers to determine if they are eligible for the program
  • A calculator feature that allows homeowners to estimate the reduction to their monthly mortgage payment that they might stand to realize under the plan
  • Resources to find free, HUD-approved counseling services for borrowers who have additional questions
  • A handy checklist to ensure homeowners collect all the documents they need before calling their servicers

                                                                                                                          

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LINKS

Fed will dump more money into Financial Sector

The Fed announcement came in today indicating that they would drop $750 billion more into the financial sector starting in July 2009.  This will compare with the January 6th rally we had earlier this year.   It appears that the government is serious about lowering rates as a major step in our economic recovery.  Bottom line is when the Fed is spending more money in the mortgage backed securities market, there is more demand for mortgages which results in lower rates.

Expanded Tax Break for Homebuyers

WASHINGTON — The Internal Revenue Service announced today that taxpayers who qualify for the first-time homebuyer credit and purchase a home this year before Dec. 1 have a special option available for claiming the tax credit either on their 2008 tax returns due April 15 or on their 2009 tax returns next year.

Qualifying taxpayers who buy a home this year before Dec. 1 can get up to $8,000, or $4,000 for married filing separately.

“For first-time homebuyers this year, this special feature can put money in their pockets right now rather than waiting another year to claim the tax credit,” said IRS Commissioner Doug Shulman. “This important change gives qualifying homebuyers cash they do not have to pay back.”

The IRS has posted a revised version of Form 5405, First-Time Homebuyer Credit, on IRS.gov. The revised form incorporates provisions from the American Recovery and Reinvestment Act of 2009. The instructions to the revised Form 5405 provide additional information on who can and cannot claim the credit, income limitations and repayment of the credit.

This year, qualifying taxpayers who buy a home before Dec. 1, 2009, can claim the credit on either their 2008 or 2009 tax returns. They do not have to repay the credit, provided the home remains their main home for 36 months after the purchase date. They can claim 10 percent of the purchase price up to $8,000, or $4,000 for married individuals filing separately.

The amount of the credit begins to phase out for taxpayers whose adjusted gross income is more than $75,000, or $150,000 for joint filers.

For purposes of the credit, you are considered to be a first-time homebuyer if you, and your spouse if you are married, did not own any other main home during the three-year period ending on the date of purchase.

The IRS also alerted taxpayers that the new law does not affect people who purchased a home after April 8, 2008, and on or before Dec. 31, 2008. For these taxpayers who are claiming the credit on their 2008 tax returns, the maximum credit remains 10 percent of the purchase price, up to $7,500, or $3,750 for married individuals filing separately. In addition, the credit for these 2008 purchases must be repaid in 15 equal installments over 15 years, beginning with the 2010 tax year.

IR-2009-14, Feb. 25, 2009

Financing for investors with more than 4 properties

Effective Friday, February 20, 2009, there is a financing option for borrowers with 5-10 financed properties. Fannie Mae’s standard guidelines restrict the number of financed properties to four. Fannie Mae has recently announced they will allow loans to borrowers that have between 5-10 financed properties, when the new loan meets the criteria listed below. [Read more...]