Realth Times of December 30, 2009
Investor Report: HUD Guidance by Kenneth R. Harney
Investors and others who expect to use FHA financing in connection with a short sale better check out the latest guidance issued by HUD last week.
A letter to lenders by FHA commissioner David Stevens essentially spells out the agency's revised policies on short sales.
Here's a quick overview:
Number one: Applicants for new FHA insured mortgages will be turned down - effective immediately - if they participated in a short sale of their principal residence, simply to “take advantage of declining market conditions,” or to “purchase a similar or superior property at a reduced price within a reasonable commuting distance” of the house they disposed of via a short sale.
Since FHA apparently believes that some homeowners may be renting out their current houses in order to buy others through short sales, Stevens's letter cautions lenders to make certain such applicants qualify under the agency's strict rules relating to rental income.
Those rules generally limit consideration of rental income from a vacated residence as part of the qualifying income to purchase another property.
In its guidance, FHA says lenders “may consider” rental income, minus an appropriate vacancy factor, when the applicant's loan to value ratio or LTV on the vacated property is 75 percent or less.
FHA rules also permit consideration of rental income when the borrower is relocating because of an employment change and has a one year signed lease agreement.
What FHA is saying with its new guidelines for lenders is this: We don't want to finance a bumper crop of rental investment houses where current owner-occupants spot a great deal in their local market that's listed as a discount-price short sale.
Even if that purchaser fully intends to occupy the replacement house as a principal residence, FHA says in effect: We want to play it safe on qualifying that buyer in terms of income sources. So we're going to be really strict when part of the applicant's qualifying income comes from renting out his or her former home.
Stevens added that people who dispose of their houses though short sales can qualify for FHA financing on another house only if they are current in payments on the mortgage for the previous year as well as on all installment debts.
On the other hand, short sellers who are in default on their mortgage - and used the short sale as an alternative to a foreclosure by their lender - generally will not be eligible for an FHA-insured home purchase loan for three years following the close of the short sale.
Copyright © 2009 Realty Times. All Rights Reserved.
Showing posts with label HUD. Show all posts
Showing posts with label HUD. Show all posts
Wednesday, December 30, 2009
Thursday, July 23, 2009
Mortgage Fraud Crackdown
From Realty Times of July 23, 2009
Mortgage Fraud Crackdown by Broderick Perkins
Apparently, even in hard times, mortgage fraud remains an easy con.
The number of Suspicious Activity Reports (SARs) for mortgage fraud tracked by the Federal Bureau of Investigation could skyrocket by nearly 300 percent this year.
Compared to 2007, mortgage fraud SARs in 2008 had already increased by more than 36 percent to 63,000. But just two months into 2009, the FBI has already documented nearly 29,000 mortgage fraud SARs. At that rate, some 174,000 SARs,
• a 276 percent increase
• could be filed by the end of the year.
And that's only what the FBI can see.
"Many mortgage finance-related entities are either loosely or completely unregulated at the state or federal level," said FBI Director Robert Mueller in recent testimony before the U.S. Senate Appropriations panel.
The good news?
"The current financial crisis has produced an unexpected consequence. They have helped reveal numerous mortgage fraud schemes, Ponzi schemes, and investment frauds, such as the Bernard Madoff scam," Mueller testified.
But while the Feds are catching up with Wall Street crooks, struggling homeowners on Main Street remain common prey. Despite tougher lending standards putting the kibosh on some types of home loan scams, organized wise guys continue to traffic in mortgage fraud.
That's prompted the U.S. Department of the Treasury, the U.S. Department of Justice (DOJ), the Department of Housing and Urban Development (HUD), the Federal Trade Commission (FTC), and the Attorney General of Illinois to launch new initiatives to pump up fraud investigations and step up enforcement actions, especially to protect homeowners seeking relief from President Obama's Making Home Affordable initiative.
The effort particularly targets loan modification and mortgage fraud.
Mortgage fraud, a relatively new form of organized crime, first cashed in on the greed that came with the boom market, when some buyers would do anything to own a home • including lie on the application. Cons, often insiders, also falsified documents, inflated appraisals and used other underhanded techniques to get home loans approved and properties flipped for a hefty profit when appreciation was skyrocketing.
With the housing market bust, however, came stricter underwriting scrutiny which helped stem the tide of loans approved with fabricated information.
Now, mortgage fraud is taking advantage of vulnerable, gullible homeowners facing foreclosure. Like those who once fibbed to cash in on the booming market, many struggling homeowners are likewise willing to do anything to remain homeowners.
Mueller said today's host of sophisticated scams are associated with new loan modification services, foreclosure bailouts, equity grabs, bankruptcy, identity theft and property flipping, among others.
Bruce Hahn, president of the American Homeowners Foundation, a non-profit advocacy group in Washington, D.C. says it's tough to tell the good guys from the bad without a scorecard.
"Some loan modification services are competent, but some are incompetent and there is another group of people who post ads to help with mortgage problems, but are basically fraudsters and fronts," Hahn said.
The FTC recently surveyed online and print advertising for mortgage foreclosure rescue operations nationwide and identified approximately 71 distinct companies running suspicious ads.
It's clear homeowners, who want to avoid being taken by the new scammers must likewise become more sophisticated.
The experts advise:
• Don't be a rube. If it sounds too good to be true • it probably is. Debts, bad credit and other financial holes didn't appear over night. They won't magically disappear over night.
"A fair number of homeowners have actually paid someone money before they see us. They see us because they paid and the company didn't do anything for them," said Martin Eichner, director of housing counseling services for Project Sentinel in Northern California.
• Be wary of strangers and unsolicited contacts, as well as high-pressure sales techniques. Avoid spam come-ons and web-based advertisements promoting the elimination of mortgage loans for an up-front fee to prepare documents to satisfy the debt. Beware of offers to "save" you from defaulting on loan payments or from foreclosure.
"The most outrageous of these schemes are offers to take your mortgage payment and hold them for you in a trust account. That is a total rip off. Never give your mortgage payment to any third party," Eichner said.
• Attempts to cajole you into making false statements in the name of mortgage relief is a red flag. Likewise don't sign blank documents or those you don't understand.
• Seek out family, friends, co-workers and others you trust who recently successfully solved a mortgage problem. Ask them for referrals. That applies to loan modifications, work outs, restructuring and refinance efforts.
"I would say contact a U.S. Department of Housing and Urban Development, but you can't just say that. We can't help everybody who needs help (because of overwhelming demand). If you hire a for-profit service you should be paying money only if (and after) they are successful. If they are an attorney, contact the state bar. For mortgage brokers (and real estate agents) check with the California Department of Real Estate," Eichner added.
Hahn also says to contact city and county housing offices for assistance and referrals and the latest information on legal, government-sponsored assistance.
Get more help from the Making Home Affordable initiative.
--------------------------------------------------------------------------------
Copyright © 2009 Realty Times. All Rights Reserved.
Mortgage Fraud Crackdown by Broderick Perkins
Apparently, even in hard times, mortgage fraud remains an easy con.
The number of Suspicious Activity Reports (SARs) for mortgage fraud tracked by the Federal Bureau of Investigation could skyrocket by nearly 300 percent this year.
Compared to 2007, mortgage fraud SARs in 2008 had already increased by more than 36 percent to 63,000. But just two months into 2009, the FBI has already documented nearly 29,000 mortgage fraud SARs. At that rate, some 174,000 SARs,
• a 276 percent increase
• could be filed by the end of the year.
And that's only what the FBI can see.
"Many mortgage finance-related entities are either loosely or completely unregulated at the state or federal level," said FBI Director Robert Mueller in recent testimony before the U.S. Senate Appropriations panel.
The good news?
"The current financial crisis has produced an unexpected consequence. They have helped reveal numerous mortgage fraud schemes, Ponzi schemes, and investment frauds, such as the Bernard Madoff scam," Mueller testified.
But while the Feds are catching up with Wall Street crooks, struggling homeowners on Main Street remain common prey. Despite tougher lending standards putting the kibosh on some types of home loan scams, organized wise guys continue to traffic in mortgage fraud.
That's prompted the U.S. Department of the Treasury, the U.S. Department of Justice (DOJ), the Department of Housing and Urban Development (HUD), the Federal Trade Commission (FTC), and the Attorney General of Illinois to launch new initiatives to pump up fraud investigations and step up enforcement actions, especially to protect homeowners seeking relief from President Obama's Making Home Affordable initiative.
The effort particularly targets loan modification and mortgage fraud.
Mortgage fraud, a relatively new form of organized crime, first cashed in on the greed that came with the boom market, when some buyers would do anything to own a home • including lie on the application. Cons, often insiders, also falsified documents, inflated appraisals and used other underhanded techniques to get home loans approved and properties flipped for a hefty profit when appreciation was skyrocketing.
With the housing market bust, however, came stricter underwriting scrutiny which helped stem the tide of loans approved with fabricated information.
Now, mortgage fraud is taking advantage of vulnerable, gullible homeowners facing foreclosure. Like those who once fibbed to cash in on the booming market, many struggling homeowners are likewise willing to do anything to remain homeowners.
Mueller said today's host of sophisticated scams are associated with new loan modification services, foreclosure bailouts, equity grabs, bankruptcy, identity theft and property flipping, among others.
Bruce Hahn, president of the American Homeowners Foundation, a non-profit advocacy group in Washington, D.C. says it's tough to tell the good guys from the bad without a scorecard.
"Some loan modification services are competent, but some are incompetent and there is another group of people who post ads to help with mortgage problems, but are basically fraudsters and fronts," Hahn said.
The FTC recently surveyed online and print advertising for mortgage foreclosure rescue operations nationwide and identified approximately 71 distinct companies running suspicious ads.
It's clear homeowners, who want to avoid being taken by the new scammers must likewise become more sophisticated.
The experts advise:
• Don't be a rube. If it sounds too good to be true • it probably is. Debts, bad credit and other financial holes didn't appear over night. They won't magically disappear over night.
"A fair number of homeowners have actually paid someone money before they see us. They see us because they paid and the company didn't do anything for them," said Martin Eichner, director of housing counseling services for Project Sentinel in Northern California.
• Be wary of strangers and unsolicited contacts, as well as high-pressure sales techniques. Avoid spam come-ons and web-based advertisements promoting the elimination of mortgage loans for an up-front fee to prepare documents to satisfy the debt. Beware of offers to "save" you from defaulting on loan payments or from foreclosure.
"The most outrageous of these schemes are offers to take your mortgage payment and hold them for you in a trust account. That is a total rip off. Never give your mortgage payment to any third party," Eichner said.
• Attempts to cajole you into making false statements in the name of mortgage relief is a red flag. Likewise don't sign blank documents or those you don't understand.
• Seek out family, friends, co-workers and others you trust who recently successfully solved a mortgage problem. Ask them for referrals. That applies to loan modifications, work outs, restructuring and refinance efforts.
"I would say contact a U.S. Department of Housing and Urban Development, but you can't just say that. We can't help everybody who needs help (because of overwhelming demand). If you hire a for-profit service you should be paying money only if (and after) they are successful. If they are an attorney, contact the state bar. For mortgage brokers (and real estate agents) check with the California Department of Real Estate," Eichner added.
Hahn also says to contact city and county housing offices for assistance and referrals and the latest information on legal, government-sponsored assistance.
Get more help from the Making Home Affordable initiative.
--------------------------------------------------------------------------------
Copyright © 2009 Realty Times. All Rights Reserved.
Monday, January 26, 2009
Assistance for Distressed Homeowners
The Federal Housing Administration (FHA) can provide some assistance to homeowners behind on their mortgages.
You can reach a US Department of Housing and Urban Development(HUD)counselor, at no cost or charge to you, for advice and guidance. FHA offers several programs to those eligible including, in some cases, a refinance loan.
In addition, for new loans FHA has relaxed some requirements on bad or leas than perfect credit folks. They also accept a lower down payment of 3.5%, less than conventional mortgages.
Ask your current lender about the "FHA Secure" program.
If you or anyone you know are in a distressed situation and could use some advice and guidance, call a HUD Counselor at 1-800-569-4287. Again, no cost to you and the sooner you act, the better the chance for help.
.
You can reach a US Department of Housing and Urban Development(HUD)counselor, at no cost or charge to you, for advice and guidance. FHA offers several programs to those eligible including, in some cases, a refinance loan.
In addition, for new loans FHA has relaxed some requirements on bad or leas than perfect credit folks. They also accept a lower down payment of 3.5%, less than conventional mortgages.
Ask your current lender about the "FHA Secure" program.
If you or anyone you know are in a distressed situation and could use some advice and guidance, call a HUD Counselor at 1-800-569-4287. Again, no cost to you and the sooner you act, the better the chance for help.
.
Wednesday, October 29, 2008
HUD GOOD NEIGHBOR NEXT DOOR PROGRAM
A super HUD program available to Police and Teachers - tough to beat a 50% discount:
GOOD NEIGHBOR NEXT DOOR PROGRAM
· HUD offers a substantial incentive in the form of a discount of 50% from the list price of a home to law enforcement officers, pre-Kindergarten through 12th grade teachers and firefighters/emergency medical techs.
· In return the borrower must commit to live in the property for 36 months.
· Eligible SFR homes are HUD REOs located in HUD determined “revitalization areas”. To search for HUD listings click the following link. http://www.mcbreo.com/st_azmain.htm. Click on “City” next to “View All Available Properties”.
· HUD requires that the borrower sign a second mortgage note for the discount amount. No interest or payments are required on this “silent second” provided that the borrower fulfills the 3 year occupancy requirement.
· You may use FHA, VA or conventional financing.
· The purchase contract must indicate that the property is eligible for the GNND Program.
.
GOOD NEIGHBOR NEXT DOOR PROGRAM
· HUD offers a substantial incentive in the form of a discount of 50% from the list price of a home to law enforcement officers, pre-Kindergarten through 12th grade teachers and firefighters/emergency medical techs.
· In return the borrower must commit to live in the property for 36 months.
· Eligible SFR homes are HUD REOs located in HUD determined “revitalization areas”. To search for HUD listings click the following link. http://www.mcbreo.com/st_azmain.htm. Click on “City” next to “View All Available Properties”.
· HUD requires that the borrower sign a second mortgage note for the discount amount. No interest or payments are required on this “silent second” provided that the borrower fulfills the 3 year occupancy requirement.
· You may use FHA, VA or conventional financing.
· The purchase contract must indicate that the property is eligible for the GNND Program.
.
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