The Department of Housing and Urban Development on October 7 announced its plans for implementing the Emergency Homeowner Loan Program, a $1 billion loan fund authorized under the Dodd-Frank Wall Street Reform and Consumer Protection Act. The loans will assist homeowners at or below 120% of an area’s median income and whose income is at least 15% less than it was prior to be laid off from previous employment. Loans may be used to pay up to 24 months of mortgage payments, including arrearages and delinquent taxes and insurance. Repayment will be over five years with no interest. The program will be offered in Puerto Rico and the 32 states not assisted under Treasury’s Innovative Program for Hardest Hit Foreclosure States. Program administration and outreach will be delegated to NeighborWorks America. HUD hopes that applications will be available by the end of the year. Further information is available in the attached document, HUD’s Program Summary.
Source: NATIONAL ASSOCIATION OF REALTORS®

Why is now a great time to buy?

Here are 10 reasons:

1. You can get a good deal. Prices are down 30 percent on average. They’re at a level that makes sense for people’s income.
2. Mortgages are cheap. At 4.3 percent on average for a 30-year fixed-rate mortgage, your costs to own are down by a fifth from two years ago.
3. You can save on taxes. When you add up the deductions for mortgage interest and others, the cost of owning can drop below renting for a comparable place.
4. It’ll be yours. The one benefit to owning that never changes is that you can paint your walls orange if you want (generally speaking; there might be some community restrictions). How many landlords will let you do that?
5. You can get a better home. In some markets, it’s simply the case that the nicest places are for-sale homes and condos.
6. It offers some inflation protection. Historically, appreciation over time outpaces inflation.
7. It’s risk capital. If the economy picks up, you stand to benefit from that, even if you’re goal is just to have a nice place to live.
8. It’s forced savings. A part of your payment each month goes to equity.
9. There is a lot to choose from. There are some 4 million homes available today, about a year’s supply. Now’s the time to find something you like and get it.
10. Sooner or later the market will clear. The U.S. is expected to grow by another 100 million people in 40 years. They have to live somewhere. Demand will eventually outpace supply.

Source: Wall Street Journal, Brett Arends (9/16/10)

In an effort to help responsible home owners who owe more on their mortgage than the value of their property, HUD is providing an additional refinancing option for underwater borrowers. The FHA Short Refinance option is targeted to help people who owe more on their mortgage than their home is worth because their local markets saw large declines in home values.

Mortgage giant Fannie Mae plans to give military families a break on their home loan payments if they are struggling because of the death or injury of a service member. The Washington-based company says it will reduce or suspend borrowers’ monthly payments up to six months. Fannie Mae is the largest buyer and backer of U.S. home mortgages, owning or guaranteeing about $3.2 trillion in home loans. Fannie Mae also says it would suspend reporting to credit bureaus for up to six months to minimize the impact on the borrower’s credit score. To determine whether they are eligible, military members or their surviving spouses should contact their mortgage company. Or, they can call a special military phone number: 1-877-MIL-4566
Read more: http://www.sacbee.com/2010/09/27/3059660/fannie-mae-offers-housing-aid.html##storylink=scinlineshareb#ixzz10pf7XnVN
Source: The Associated Press
Published: Monday, Sep. 27, 2010 – 7:27 am

Some banks are launching a “second look program” to review loans that have been denied in order to identify circumstances that might persuade underwriters to reverse their decisions.

The Financial Services Roundtable, a trade group of 100 financial companies, including Bank of America Corp., J.P. Morgan Chase & Co., and U.S. Bancorp. Bankers say these programs are starting to loosen the logjams that have made it so hard for both home buyers and small businesses to get loans.

Source: The Wall Street Journal, Ruth Simon (09/23/2010)

RISMEDIA, September 23, 2010–As the number of homes around the country entering the foreclosure process continues to steadily rise, a recent report from the Center for Economic and Policy Research (CEPR) suggests that giving homeowners the right to rent their house at a fair market price may be one of the best ways to address the nation’s foreclosure crisis.

“With roughly one-in four mortgages underwater, the loan modification plans put forth so far have done little to help homeowners facing foreclosure,” said Dean Baker, Co-Director of CEPR and an author of the report. “Right to Rent, on the other hand, would benefit millions, provide families with real housing security, and could go into effect immediately.”

The report, “The Gains from Right to Rent in 2010,” analyzes the costs of renting versus owning a house in several major cities and finds that the Fair Market Rents in these metropolitan areas is often much lower than the cost of ownership.

“Ordinarily, the gap between owning and renting is not that large.” continued Baker, “Due to the enormous run-up in house prices over the housing bubble years, however, ownership costs now vastly exceed rental costs in many of the bubble markets and homeowners in these markets have much to gain from having the opportunity to remain in a home as a renter following a foreclosure.”

The report documents the costs of renting and owning before and after taxes in 16 metropolitan statistical areas (MSAs) and details substantial savings gained from renting across all scenarios depicted. The various scenarios consider the costs of mortgage payments, property taxes, insurance and maintenance costs, and mortgage deductions. An appendix is included that compares ownership and rental costs across 100 MSAs as well.

Under Right to Rent legislation, such as HR 5028, sponsored by representatives Grijalva (NM) and Kaptur (OH), Congress would temporarily alter foreclosure laws to let foreclosed homeowners remain in their homes as renters for a substantial period of time. This would save families from being kicked out of their homes and would go far to stop the blight of foreclosures affecting many of our communities. This plan requires no taxpayer dollars and no new bureaucracy to implement

Mortgage rates: Week ending 9/16/2010 30-yr. fixed: 4.37 Fees/points: 0.7% 15-yr. fixed: 3.82% Fees/points: 0.6% 1-yr. adjustable: 3.40% Fees/points: 0.7% (Source: Freddie Mac)

The California Housing Finance Agency (CalHFA) announced this week the launch of a new fixed-rate, 30-year, FHA-insured mortgage program for low- and moderate-income home buyers. (Source: CAR)

The U.S. Dept. of Housing and Urban Development recently announced a new agreement with the nation’s top mortgage lenders to offer select state and local governments, including California, and nonprofit organizations a “first look” or right of first refusal to purchase foreclosed homes before making the properties available to private investors.

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