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WASHINGTON, D.C. - The House of Representatives
overwhelmingly passed provisions to help consumers take advantage of
increased mortgage market credit, stabilize the housing market and
help homeowners refinance out of bad loans. The legislation,
passed as part the economic stimulus package, will allow the Federal
Housing Administration (FHA) and the Government Sponsored Enterprises
(GSE) of Fannie Mae and Freddie Mac to temporarily increase their loan
limits to serve a greater number of areas of the country.
WASHINGTON, Feb. 18 --
U.S. President Barack Obama on Wednesday revealed a mortgage relief
plan in an effort to prevent more Americans from losing their homes.
The plan is expected to help between 7 million and 9 million American
families to avoid foreclosure, said the president in an address in
Mesa, Arizona. In addition, the plan will take major steps to keep
mortgage rates low for millions of middle-class families looking to
secure new mortgages.
Facts on the Homeowner Stimulus Plan
A rundown of the Homeowner Affordability
and Stability Plan announced yesterday.
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Aims to allow 4 million to 5 million
homeowners to refinance mortgages
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Establishes $75 billion fund to
reduce homeowners' monthly mortgage payments
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Sets $6,000 estimate for highest
average resulting increase in housing value
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Provides $1.5 billion in assistance
for renters displaced by foreclosure
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Gives Fannie Mae and Freddie Mac a
$50 billion increase in allowable mortgage-backed securities
Rates
Drop as Obama Signs Stimulus Plan
Associated Press
The
average U.S. rate on a 30-year, fixed mortgage fell this week as
President Obama enacted an economic stimulus and pledged $275 billion
to reduce foreclosures The
rate fell to 5.04 percent from 5.16 percent a week earlier, said
Freddie Mac, a mortgage lender in McLean. A year ago, the 30-year,
fixed-rate mortgage averaged 6.04 percent. Rates are falling as the
Federal Reserve buys mortgage-backed securities to encourage lenders
to lower rates. The
rates do not include add-on fees known as points. The nationwide fee
for 30-year, fixed mortgages averaged 0.7 point for this week. The fee
for 15-year mortgages averaged 0.6 point. Fees
for five-year, adjustable-rate mortgages averaged sixth-tenths of a
point and 0.5 point for one-year, adjustable rate mortgages.
President Barack Obama’s
$787 Billion Economic Stimulus Bill has been signed into law and will
take effect on March 4, 2009
One-year
Increase in FHA’s Ability to Guarantee More Loans.
Currently borrowers
in many parts of the country are cut off from FHA financing. This revision
would boost FHA loan limits to 125% of an area’s median home price (but not
to exceed $729,750) for 2008. This will provide needed mortgage financing
to borrowers in markets where such funds are currently unavailable or
limited. According to a 2007 GAO report, during the recent housing boom
(where the number of nationwide loans rose), the total number of FHA loans
fell from 763,584 in 2001 to 286,470 in 2005. “FHA’s market share in terms
of numbers of loans fell from 19 percent in 1996 to 6 percent in 2005, with
almost all of the decline occurring since 2001.” This will help FHA return
to its traditional role in housing finance.
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HomeOwnerStimulus.org website that is dedicated to making sure people have
the information and resources they need to receive Mortgage Stimulus Relief,
entitlements and financing. Websites like Recovery.gov lets you, the taxpayer, figure out where
the money the money is going from the American Recovery and Reinvestment
Plan.
HomeOwnerStimulus.org helps you receive it.
We do not want any Americans to miss out on their share of the economic
stimulus package. Some key highlights of the bill are:
American Recovery and
Reinvestment Act offers the following provisions:
- FHA Loan Limits -
FHA loan amount limits will be raised to $729,750 for homes in high-cost
areas. Areas with higher-valued homes will enjoy the many benefits of an FHA
loan, such as low rates and easier qualification standards. The bill
reinstates 2008 FHA loan limits, with a maximum cap of $729,750. The bill
also provides the option, if warranted, to increase loan limits for any
“sub-area”, i.e. an area smaller than a county. These limits will expire
December 31, 2009.
- Home Ownership Tax
Credit - A non-refundable tax credit of up to $8,000 will be
available for buyers who purchase a home this year-before December 1,
2009–and who have not bought a house in the previous 3 years. This tax
credit amount is based on 10-percent of the home’s purchase price, up to
$8,000. To qualify, homeowners must keep their home for at least 3 years.
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Simplified
Refinancing - Borrowers with less than a 20-percent equity stake in
a traditional loan guaranteed by Fannie Mae or Freddie Mac (commonly
referred to as “conforming” loans) may now refinance to up to 95-percent of
their home’s market value without purchasing private mortgage insurance,
which typically can increase monthly payments by hundreds of dollars.
- Neighborhood
Stabilization - $2 billion in additional funding is also made
available to create the Neighborhood Stabilization Program (NSP) to address
the problems facing whole neighborhoods that are decimated by foreclosures.
Funds can be used to purchase, manage, repair and resell foreclosed and
abandoned properties. States and localities can also use these funds to
establish financing methods for purchasing and redeveloping foreclosed
properties.
- Reverse Mortgages -
Loan limits on Home Equity Conversion Mortgage (HECM) - or “reverse
mortgage” loans will rise to $625,500 until the end of 2009. Current limits,
which mirror conforming loan limits, will be raised to open up reverse
mortgage options for many seniors who may want to rely on home equity as a
stable source of income.
- Low Income Housing -
States will receive financing for construction and rehabilitation of
low-income housing.
- Rural Housing Programs
- 100-percent financing will be made available for rural housing
loan programs.
- Energy Efficiency
Benefits - Tax credits for energy-efficient upgrades will be
extended through 2010.
- Foreclosure Protection
- $75 billion program will be established to subsidize loan
modifications for participating lenders to help many homeowners facing
foreclosure.
Sputtering start for mortgage stimulus
Updated: Thursday, 19
Mar 2009
INDIANAPOLIS (WISH) -
Two weeks ago, President Obama officially launched his mortgage
stimulus plan. The plan was designed to attract troubled
homeowners like spring birds to a feeder. But two weeks after
its launch, not one Hoosier has been helped.
Al Thorup is the
executive director of the Indiana Mortgage Bankers Association.
He says the plan is a good one, but it's complicated.
"In some respects,
the cart was put before the horse, in that the announcement was
made March 4, in general. But there were not enough specifics
for go forward full bore," said Al Thorup. "There's been a
number of conference calls nationally about this, there's been a
lot of questions brought up that still need to be answered. But
there is an eagerness among lenders to get this rolling."
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The government plan
is designed to do three things: help qualified homeowners
refinance, provide incentives to lenders to make home loans more
affordable, and provide financial backing to Fannie Mae and
Freddie Mac.
At Nichols Mortgage
Services on Meridian, lenders are eager for the program to
begin. Kim Hoffman-Spencer expects it will be popular.
"I think within the
next two months, we will get swamped with a lot of business,"
said Hoffman-Spencer
In the meantime,
business is picking up. With mortgage rates at five percent or
below, Hoffman-Spencer said homeowners new and old are taking
advantage of the low rates. "We're getting a lot of calls for
refinances. A lot of first-time homebuyers are really out
saturating the market right now," said Hoffman-Spencer.The plan
will be rolled out next month. In the meantime, to find out if
you qualify, visit
makinghomeaffordable.gov . The other thing you can do is
call your lender to see if you qualify.
Obama proposes relief for homeowners,
stimulus for economic woes
March 27, 2008
Democrat Barack
Obama said Thursday tougher government regulations that
reflect the realities of modern finance are needed to get a
grip on the economy before it gets even worse.
"We do American
business — and the American people — no favors when we turn
a blind eye to excessive leverage and dangerous risks,"
Obama said.
The presidential
candidate spoke not far from Wall Street, hard hit by the
mortgage meltdown and credit problems.
To fix the
economy, Obama proposed relief for homeowners and an
additional $30 billion stimulus package to address the
nation's economic woes.
"If we can extend
a hand to banks on Wall Street, we can extend a hand to
Americans who are struggling," he said.
New York Mayor
Michael Bloomberg, the almost candidate, warmly introduced
Obama but stopped short of an endorsement.
Bemoaning the
nation's economic woes, Obama dismissed Republican rival
John McCain's approach as pure hands-off. On Tuesday, McCain
derided government intervention to save and reward banks or
small borrowers who behave irresponsibly though he offered
few immediate alternatives for fixing the country's growing
housing crisis. Obama said McCain's plan "amounts to little
more than watching this crisis happen."
Instead, Obama
said, the next president should:
—Expand oversight
to any institution that borrows from the government.
—Toughen capital
requirements for complex financial instruments like mortgage
securities.
—Streamline
regulatory agencies to end overlap and competition among
regulators.
While he laid out
a half-dozen principles for closer scrutiny of the financial
markets, he offered no specifics, such as which agencies
should be reorganized or exactly how the government should
go about peering over the shoulders of bank executives.
Obama's
Democratic rival Hillary Rodham Clinton planned a speech on
the economy Thursday in Raleigh, N.C.
Even before Obama
finished his speech, McCain said in a statement, "there is a
tendency for liberals to seek big government programs that
sock it to American taxpayers while failing to solve the
very real problems we face."
The political
debate comes as a new government report shows the economy
nearly sputtered out at the end of the year and is probably
faring even worse amid continuing housing, credit and
financial crises.
The Commerce
Department reported that gross domestic product — the value
of all goods and services produced in the country —
increased at a feeble 0.6 percent annual rate in the
October-to-December quarter. The reading — unchanged from a
previous estimate a month ago — provided stark evidence of
just how much the economy has weakened. In the prior
quarter, the economy clocked in at a sizzling 4.9 percent
growth rate.
"Making Home
Affordable" Feds unveil plan to help 9 million stay in homes
WASHINGTON – March 4, 2009 - The Obama administration kicked off a
new program Wednesday that's designed to help up to 9 million
borrowers stay in their homes through refinanced mortgages or loans
that are modified to lower monthly payments.
The Treasury Department released detailed guidelines designed to let
the lending industry know how to enroll borrowers in the program
announced last month."It is imperative that we continue to move with speed to help make
housing more affordable and help arrest the damaging spiral in our
housing markets," Treasury Secretary Timothy Geithner said in a
statement.
The administration, launching what it calls the "Making Home
Affordable" initiative, said that borrowers will have to provide
their most recent tax return and two pay stubs, as well as an "affidavit
of financial hardship" to qualify for the $75 billion loan
modification program, which runs through 2012.
Borrowers are only allowed to have their loans modified once, and
the program only applies for loans made on Jan. 1 2009 or earlier.
Up to 4 million borrowers are expected to qualify. Mortgages for
single-family properties that are worth more than $729,750 are
excluded.
If you are a homeowner who is current on your mortgage
payments but unable to refinance to a lower interest rate because
your home value has decreased, you may be able to refinance.
Do I
qualify for a Home Affordable Modification? Answer to these
questions:
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Is your
home your primary residence?
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Is the
amount you owe on your first mortgage equal to or less than
$729,750?
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Are you
having trouble paying your mortgage? For example, have you had a
significant increase in your mortgage payment OR
reduction in your income since you got your current loan
OR have you suffered a hardship that has increased your
expenses (like medical bills)?
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Did you
get your current mortgage before January 1, 2009?
Information on
your answers for
Fannie Mae or Freddie Mac loans can be
located at
FinancialStability.gov
along with additional information
on Making Home Affordable Modifications
Please be patient Servicers received the
detailed program requirements on March 4, 2009 and it may take some
time before they are fully operational. However, Treasury has
encouraged servicers to immediately assist delinquent borrowers at
the greatest risk of foreclosure
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