How long will you be underwater?

http://lowes.inman.com/newsletter/2012/05/31

Bank of America Starts Principal Reduction Effort

NewsGeni.us

Tuesday, May 8, 2012 — Bank of America has started sending letters to thousands of homeowners in the United States, offering to forgive a portion of the principal balance on their mortgages by an average of $150,000 each.
The reduction for qualifying homeowners could amount to monthly savings of up to 35 percent on mortgage payments, Bank of America said in a news release on Monday evening.
The principal reduction offers from Bank of America Home Loans are the result of a $25 billion settlement agreement earlier this year with 49 state attorneys general as well as federal authorities who had been investigating allegations of abuses over the handling of foreclosures.
“To the extent principal reduction and other modification tools help us turn mortgages headed for possible foreclosure into long-term performing loans, it will be positive for homeowners, mortgage investors and communities,” Ron Sturzenegger, a legacy asset servicing executive, said in the statement.
The bank said it planned to contact more than 200,000 homeowners who could be candidates for the offers, sending letters to a majority of them by the third quarter of this year.
To be eligible for the principal reductions, however, homeowners will have to meet certain criteria, including: having a loan owned or serviced by Bank of America; owing more on the mortgage than their property is worth; and being at least 60 days behind on payments as of the end of January.
In the statement, the bank said it had started making such offers in March to a narrower group of homeowners — those who were already in the process of seeking mortgage modification. The bank estimated that the earlier wave of trial reduction offers to about 5,000 people could amount to more than $700 million in forgiven principal. But homeowners have to make at least three timely payments for the reductions to become permanent.


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Check Eligibility Online for HARP 2.0

What is HARP?

• The Home Affordable Refinance Program (HARP) allows homeowners refinance their mortgages, even if the mortgage owed is greater than the value
• HARP Refinances are made in cooperation with Fannie Mae and Freddie Mac through the Making Home Affordable program endorsed by President Obama
• HARP Mortgage Lenders are licensed by the CA Department of Corporations, the CA Department of Real Estate and applicable National regulations

http://refinanceharp.org/Harp%20Mortgage%20Refinance.html

© 2012 RefinanceHARP.org, all rights reserved.

Where Mortgage Rates "Come From"

A Good Explanation
Where Mortgage Rates "Come From" For every type of U.S. mortgage, there's a different basis for assigning a mortgage rate. For example, mortgage rates for portfolio loans (e.g.; jumbo mortgage, super jumbo mortgage, non-warrantable condo) are often based on some cost of funds-type index such as COFI, plus a spread. HELOCs are based on Prime Rate. Other mortgage rates, though, are based mortgage bond prices within a particular market. Conforming mortgage rates are based on the price of Fannie Mae and Freddie Mac mortgage-backed securities, as one example. By contrast, FHA mortgage rates are based on the price of a Ginnie Mae mortgage-backed security. This is why conforming mortgage rates can fall on a day that FHA mortgage rates are up -- the products' respective rates come from separate, distinct markets. Note that no mortgage rates, however, are based on the 10-year treasury. If you want to know where mortgage rates are headed, therefore, you have to watch the mortgage-backed bond market. That's fa ct and it's provable. 10-Year Treasuries Are A False Indicator In defense of the 10-year treasury, it's got a terrific, long term correlation to mortgage bonds And perhaps that's why "expert" like to link the two. The issue, though, is that everyday homeowners in places like Orange County, California; Bergen County, New Jersey; or Montgomery County, Maryland don't shop for mortgage rates over the 5-year correlation window cited by the expert. Rate shoppers compare mortgages rates over the course of one day. There's very little correlation between the 10-year treasury and mortgage bonds when we consider the actual timeline on which a rate shopper is active. On same days, 10-year treasuries will move in the same direction as Fannie Mae, Freddie Mac or Ginnie Mae bonds. On other days, 10-year treasuries will move in the opposite direction. In 2011, there was only one calendar day on which the 10-year treasury note and the current Fannie Mae coupon made the exact same move in the exact same direction. Nearly every day, the 10-year treas ury moves differently from the drivers of conforming and FHA mortgage rates, proving that you can't use the 10-year treasury as a mortgage rate proxy. It fails terribly. Thank you for allowing me to serve you. Kevin Lambe Loan Officer 1550 E McKellips Rd Suite 117 Mesa, AZ 85203 Phone: 480-344-1992 Fax: 480-374-7092 klambe@amerifirst.us www.kevinlambe.com Cut and paste this link into your browser: http://www.referralswelcome.com/referrals.html?qid=50665610