The Treasury Department released a new report Monday highlighting the results of its flagship Home Affordable Modification Program (HAMP). Nearly 910,000 homeowners have received a permanent HAMP modification to date, saving an estimated $9.9 billion in monthly mortgage payments.

Treasury says borrowers now entering HAMP have a better chance of earning a permanent modification and realizing long-term success. Eighty-three percent of eligible homeowners that signed on to HAMP since June 2010 have received a permanent modification, with an average trial period of 3.5 months.

Treasury’s Making Home Affordable Unemployment Program (UP) provides a temporary forbearance to homeowners who’ve lost their jobs. Under Treasury guidelines, unemployed homeowners must be considered for a minimum of 12 months’ forbearance. So far, servicers have initiated 16,633 UP forbearance plans.

The government’s Second Lien Modification Program (2MP) was also prominently featured in this month’s report. Treasury says 47 percent of eligible second liens have received a 2MP modification, with many of the remaining second liens still in the evaluation process, awaiting homeowner response to the 2MP offer, or awaiting conversion of the first lien HAMP trial to permanent status.

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The Federal Housing Administration (FHA) is extending the temporary waiver of its property anti-flipping rule through the end of 2012.

FHA rules typically prohibit insuring a mortgage on a home owned by the seller for less than 90 days. In 2010, however, the agency waived this regulation, and later extended the waiver through 2011.

The new extension announced late last week will permit buyers to continue to use FHA-insured financing to purchase HUD-owned and bank-owned properties, no matter how long the homeowner has held the title, through December 31, 2012.

FHA says the waiver will allow homes to resell as quickly as possible, helping to stabilize real estate prices and revitalize communities experiencing high foreclosure activity.

Since the original waiver went into effect on February 1, 2010, FHA has insured nearly 42,000 mortgages worth more than $7 billion on properties resold within 90 days of acquisition.

The agency says its own research has found that in today’s market, acquiring, rehabilitating, and reselling foreclosed properties to prospective homeowners often takes less than 90 days.

As a result, FHA says prohibiting the use of its mortgage insurance for a subsequent resale within 90 days would adversely impact the willingness of sellers to consider offers from potential FHA buyers, namely because they would be required to cover holding costs and the risk of vandalism that comes with allowing a property to sit vacant over a 90-day period of time.

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Data released by Lender Processing Services (LPS) Thursday shows mortgage delinquencies are continuing to decline, now nearly 30 percent below their January 2010 peak.

Loans in the process of foreclosure, on the other hand, are steadily rising. LPS says foreclosure inventories reached an all-time high at the end of October, making up 4.29 percent of all active mortgages.

The average days delinquent for loans in foreclosure extended as well during the month of October, setting a new record of 631 days since last payment, while the average days delinquent for loans 90 or more days past due but not yet in foreclosure decreased for the second consecutive month.

LPS says judicial vs. non-judicial foreclosure processes remain a significant factor in the reduction of foreclosure pipelines from state to state, with foreclosure inventory percentages in non-judicial less than half that of their judicial counterparts.

This is largely a result of the fact that foreclosure sale rates in non-judicial states have been proceeding at four to five times that of judicial, LPS explained.

Non-judicial foreclosure states made up the entirety of the top 10 states with the largest year-over-year decline in non-current loans percentages. Arizona led the way with a 23.9 percent annual drop in non-current mortgages. California wasn’t far behind with a 20.2 percent decline, and in Nevada, non-current loans are down 19.1 percent from a year earlier.

LPS’ October data also showed that mortgage originations are on the rise, reaching levels not seen since mid-2010. Mortgage prepayment rates have also spiked, as much of the new origination is related to borrower refinancing. LPS says loans originated in 2009 and later are the primary drivers of the increase in refinances.

While origination activity for Federal Housing Administration (FHA) loans is down, GSE and FHA originations still account for the vast majority of all new loans – nearly nine out of every 10 new mortgages, according to LPS.

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WASHINGTON – Dec. 2, 2011 – Fannie Mae and Freddie Mac announced yesterday that they would suspend evictions of foreclosed single family and 2-4 unit properties from Dec. 19, 2011, through Jan. 2, 2012. While lenders will continue completing legal and administrative paperwork, no families will be thrown onto the street over the holidays.
“The holidays are meant for families to spend time together, especially if they’ve gone through the stress of financial challenges and foreclosure,” said Terry Edwards, Fannie Mae’s executive vice president of credit portfolio management. “No family should have to give up their home during this holiday season. Fannie Mae is committed to helping borrowers avoid foreclosure whenever possible and we encourage any homeowner who is having difficulty making their payment to reach out for help.”
While Fannie Mae and Freddie Mac back roughly half the mortgages in the U.S., some lenders also promised to place a moratorium on evictions over the holidays. Bank of America and Wells Fargo, for example, told CNNMoney that they had no plans to evict troubled homeowners before 2012.
Beyond altruism, the mortgage industry hopes to avoid bad publicity at a time of year when news stories focus on charity and kindness.
The eviction moratoriums apply only to owner-occupied homes.

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Industry data released Thursday indicates the number of borrowers in the United States behind on their mortgage payments is showing signs of improving.

The Mortgage Bankers Association (MBA) reported that the national delinquency rate for residential home loans fell to 7.99 percent in the third quarter.

That’s the lowest reading since the fourth quarter of 2008, and it represents a decline of 45 basis points from the second quarter of this year and a drop of 114 basis points from the third quarter of last year.

The 30-day delinquency rate – typically a precursor of trends to come – reached its lowest level since the second quarter of 2007 at 3.19 percent.

The overall delinquency rate encompasses borrowers who have missed one or more payments but are not yet in foreclosure. While delinquencies fell, the number of borrowers entering the foreclosure process rose.

The percentage of loans on which foreclosure actions were started during the third quarter was 1.08 percent, up 12 basis points from the previous quarter but down 26 basis points from one year ago.

The nation’s foreclosure inventory rate, which includes all loans in foreclosure, was 4.43 percent at the end of the third quarter. That’s the same reading reported for the second quarter, and represents only a 4 basis point increase from a year earlier.

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1. Do Nothing – If a homeowner does nothing, they most likely will lose their home at foreclosure auction. Loan applications generally ask if the applicant has ever been foreclosed upon. Credit reports also disclose this damaging information. Not the best option.

2. Payoff/Refinance – Completely paying off the entire loan amount plus any default amount and fees. Usually this is accomplished through a refinance of the debt. New debt is at a normally higher interest rate and there may be a prepayment penalty because of the recent default. With this option, there should be equity in the home.

3. Reinstatement – Paying the entire default amount plus interest, attorney fees, late fees, taxes, missed payments and fees.

4. Loan Modification – Utilizing the existing mortgage company to refinance the debt or extend the terms of the loan. This may allow the homeowner to catch up at a more affordable level. To qualify, you must prove to the lender you have fixed the problem that caused the late payment.

5. Forbearance – Lender may be able to arrange a repayment plan based on the homeowner’s financial situation. The lender may even be able to provide a temporary payment reduction or suspension of payments. Information will be required from the lender to show that you are able to meet the new payment plan requirements.

6. Partial Claim – A loan from the lender for a 2nd loan to include back payments, costs and fees.

7. Deed in Lieu of Foreclosure – Give the property back to the bank instead of the bank foreclosing. Banks generally require the home be well maintained, all mortgage payment and taxes must be current. Most loan applications ask if this has ever happened.

8. Bankruptcy – This option can liquidate debt and/or allow more time. I can refer you to a qualified bankruptcy attorney.

* Chapter 7 (Liquidation) To completely settle personal debt.
* Chapter 13 (Wage Earner Plan) Payments are made toward a plan to pay off debts in 3-5 years.
* Chapter 11 (Business Reorganization) A business debt solution.

9. Sale – If the property has equity (money left over after all loans and monetary encumbrances are paid). The homeowner may sell the home without lender approval through a conventional home sale. In this case, the homeowner will get cash from the sale. On the other hand, a Short Sale, also known as a pre-foreclosure sale, can be negotiated with your lender by your Real Estate Professional if what is owed is MORE than the property’s value.

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The industry’s four largest mortgage servicers all say they will be taking part in the revamped Home Affordable Refinance Program (HARP).

Bank of America, Chase, Citigroup, and Wells Fargo have each expressed their support of the program and the changes that will allow more underwater homeowners to refinance at today’s lower interest rates all throughout San Diego County.

Government officials expect the program’s revisions – particularly the GSEs’ waiver on representations and warranties – to increase competition for mortgage refinancing.

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Borrowers who are current on their home loans in San Diego County may be able to refinance for lower interest rates, even if they are seriously upside down. The Federal Housing Finance Agency (FHFA) announced today that it will broaden the scope of the Home Affordable Refinance Program (HARP) by removing the current 125 percent loan-to-value cap for fixed-rate mortgages backed by Fannie Mae and Freddie Mac. Other program enhancements include for San Diego, among other things, reducing certain fees, eliminating the need for a new property appraisal if the FHFA has a reliable automated valuation model (AVM) estimate, and extending HARP until the end of 2013. New federal guidelines for the HARP changes should be released to mortgage lenders and servicers by November 15.

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Mortgage rates in San Diego County are hovering not far above record lows set during the first week in October, but demand for purchase real estate loans hit a low last week not seen since 1996, surveys of lenders show.

Freddie Mac's latest Primary Mortgage Market Survey showed rates for 30-year fixed-rate mortgage (FRM) averaging 4.11 percent with an average 0.8 point for the week ending Oct. 20.

That's virtually unchanged from 4.12 last week, and not far above the all-time low in records dating to 1971 of 3.94 percent set during the week ending Oct. 6. Rates on the popular 30-year fixed-rate mortgage were at 4.21 percent this time a year ago, before climbing to a 2011 high of 5.05 percent in February.

For 15-year fixed-rate mortgages, rates averaged 3.38 percent with an average 0.8 point, essentially unchanged from 3.37 percent last week. The 15-year mortgage hit an all-time low in records dating to 1991 of 3.26 percent during the week ending Oct. 6.

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If your mortgage is held by Freddie Mac, then you are one of over 12 million single-family homeowners, or part of approximately 23 percent of the mortgage market. Unfortunately, market-wide, there are over 2.1 million homes in foreclosure, including thousands held by Freddie Mac.

In order to better understand the Freddie Mac stance on foreclosures, here are a few facts.

First, fewer than 500,000 Freddie Mac homeowners are currently in serious default on their mortgage. That is just 10 percent of serious delinquencies in the market as a whole.

Next, while 114,000 foreclosures were processed by Freddie Mac in the first 9 months of 2010, another 211,000 delinquent Freddie Mac borrowers actually avoided foreclosure. This was thanks in part to Freddie Mac's policy of extending to its servicers the ability to stop or suspend a foreclosure in exchange for an alternative plan. These alternatives include such things as short sales, deed-in-lieu, and even a loan workout.

According to Anthony Renzi, executive vice president at Freddie Mac, "Borrowers are not being rushed through the foreclosure process. It takes 449 days, on average, to complete a foreclosure on a Freddie Mac loan. In these foreclosures, borrowers had been behind on their payments for an average of more than a year."

It isn't just homeowners who wish to avoid foreclosure. Lengthy foreclosure delays cost Freddie $10,000 to $15,000 a year per mortgage. In addition, according to Renzi, "We pay the loan servicing industry about $5 billion per year to service our loans. We offer additional financial incentives for servicers to avoid foreclosure."

Perhaps above all, Freddie Mac holds its servicers to the credo to "treat borrowers fairly, with respect, and in full compliance with all applicable laws, regulations, and Freddie Mac policies."

Have more questions about the Freddie Mac foreclosure process, contact us