New numbers were published by the government a few weeks back with regard to HAMP, the government's loan modification program. And I was surprised they would release the numbers! Any one who has tried to obtain a loan modification, this might not be too big of a surprise, until you find out how much the government has paid out.
Since the program started earlier this year over 3.1 million have applied for a short sale and the lender has requested initial documents to process. Out of 3.1 million people only 31,000 have received a permanent loan modification, that's only 1% and well short of the 4 million people our government promised to help!!!! While, lenders and the government guidelines are to blame, it's not all their fault. There are a lot of people that don't send in the paper work or are just plain tired of the headache tying to obtain loan modification and give up.
As I have said in the past, if you don't have professionals helping the public, the success rate of any loan modification program will be low. There is just too much paper work and too much to know for the average American to handle.
Now here is the real kicker. For helping 31,000 Americans lower the mortgage payments lenders have received over $27 BILLION in incentives from the government. $27 BILLION!!!! ARE YOU KIDDING ME!!! If the government would have paid off mortgages of $200,000, they could helped 135,000 home owners pay their mortgage IN FULL!!!!
HAMP has become another bank bail out, with out all the bad press that TARP received. This is amazing, that we would pay $27 BILLION to lenders to help on 31,000 people. And now the government has not only created a similar program for short sales, they have also increase the HAMP funds to $50 BILLION.
The bottom line is, that lenders are getting RICH without providing any service or product, and we are paying for it. The loan modification and short sales that we are paying for, lenders would have done regardless of a government incentive program, as it SAVES them money. And I have heard countless stories and worked on loan modifications for friends that qualify for HAMP and are being denied for no reason, except that they don't help the bottom line of the lender.
If you are working on a loan modification, good luck and hopefully it's the lenders financial best interest.
Wednesday, December 23, 2009
Tuesday, November 3, 2009
HVCC Ended Appraisal Fraud?
Fannie Mae and Freddie Mac along with the Attorney General of New York created this great program called Housing Valuation Code of Conduct (HVCC) that would solve all the appraisal fraud problems we have experienced over the last few years. While EVERY ONE in the business knew this was bad idea from the beginning the public was unable to let their voice be heard.
HVCC has not only resulted in higher fees and additional headaches for the consumer, a recent report shows appraisal fraud has actually increased by 40%. Another government intervention failure and I know there will be more to come.
When will they learn to talk to experts in the business before they create or pass new guidelines/laws?
HVCC has not only resulted in higher fees and additional headaches for the consumer, a recent report shows appraisal fraud has actually increased by 40%. Another government intervention failure and I know there will be more to come.
When will they learn to talk to experts in the business before they create or pass new guidelines/laws?
Wednesday, August 12, 2009
The Moving Target
As the mortgage industry continues to evolve the toughest obstacle to over come is the constant moving target of loan approval. Tougher guidelines continue to limit home ownership to those who want to buy. Many potential home owners are finding out they may have qualified last month to purchase a home and now they don't OR they are approved for a much lower loan amount. So what can you do to make sure that you are able to buy home today AND next month with guidelines changing so rapidly and often? 
You need to make a budget for yourself and know what you can afford and WANT to pay on a monthly basis. The biggest problem most potential home owners make is they try to purchase a house at their qualifying amount, which is not always what they can afford. Mortgage underwriters only account for the debt that is reporting on your credit and you may have other obligations that are unknown to the underwriter. Make sure you have room in your budget for emergencies and don't over buy. By not over buying you are also protecting yourself from debt to income ratio guidelines changing.
Pay off your debt and save money! I know this sounds like common sense, but you don't how many people purchase new items for their home BEFORE they close or start the approval process. The lower your debt and the higher your savings will help your chances of loan approval when guidelines change. Mortgage underwriters will grant exceptions on certain guidelines if there are compensating factors and the two biggest compensating factors; our your debt to income ratio and savings.
Plan ahead - Once you obtain a mortgage approval it is typically good for 120 days, but you must be approved FIRST. Before you start looking for houses talk with a mortgage professional and obtain underwriting approval. This way if guidelines change, you most likely won't be affected as your loan is already approved. Also, the approval process is taking a little longer then it did six months ago, if you wait to start the approval process until you are under contract you may run in to complications with closing on time.
Finally, be prepared for the loan approval process to be a little more in depth and require more documentation then you did the last time you purchased a house or refinanced. If you haven't obtained a new mortgage in the last 12 months you are going to be surprised/shocked on how different the process is now.
If you have any questions or would like to be pre-approved for a mortgage please call 303.666.6550, email, or visit us online.
http://www.colomortgages.com/
You need to make a budget for yourself and know what you can afford and WANT to pay on a monthly basis. The biggest problem most potential home owners make is they try to purchase a house at their qualifying amount, which is not always what they can afford. Mortgage underwriters only account for the debt that is reporting on your credit and you may have other obligations that are unknown to the underwriter. Make sure you have room in your budget for emergencies and don't over buy. By not over buying you are also protecting yourself from debt to income ratio guidelines changing.
Pay off your debt and save money! I know this sounds like common sense, but you don't how many people purchase new items for their home BEFORE they close or start the approval process. The lower your debt and the higher your savings will help your chances of loan approval when guidelines change. Mortgage underwriters will grant exceptions on certain guidelines if there are compensating factors and the two biggest compensating factors; our your debt to income ratio and savings.
Plan ahead - Once you obtain a mortgage approval it is typically good for 120 days, but you must be approved FIRST. Before you start looking for houses talk with a mortgage professional and obtain underwriting approval. This way if guidelines change, you most likely won't be affected as your loan is already approved. Also, the approval process is taking a little longer then it did six months ago, if you wait to start the approval process until you are under contract you may run in to complications with closing on time.
Finally, be prepared for the loan approval process to be a little more in depth and require more documentation then you did the last time you purchased a house or refinanced. If you haven't obtained a new mortgage in the last 12 months you are going to be surprised/shocked on how different the process is now.
If you have any questions or would like to be pre-approved for a mortgage please call 303.666.6550, email, or visit us online.
http://www.colomortgages.com/
Subscribe to:
Posts (Atom)
