It’s easy to forget that, when buying a distressed home, it’s not just the seller who’s having issues. The building itself, especially if it’s bank-owned (and likely neglected) is often in a state of disrepair — everything from weather damage to wood rot to worse.
A family that buys a foreclosure or REO might love the discount (an average of 27 percent), but then get sticker shock when the repair estimates come in.
Housing Wire is reporting that Federal officials have confirmed that qualified residential mortgage standards and rules won’t be released/in place in 2012.
QM = qualified mortgages; all mortgages must meet these broad standards.
QRM = qualified residential mortgages; a stricter standard a loan must meet if the lender wants it to be backed by the Federal government
Both standards are up in the air. QRMs will likely have a down payment requirement (at one point 20% was being considered, but that’s pretty much off the table).
Three congresscritters — Karen Bass (D-Calif.), Robert J. Dold (R-Ill.), and Luis Gutierrez (D-Ill.) — have introduced a bill that would reduce the mortgage insurance costs for first-time buyers looking for an FHA loan.
On June 11, FHA’s mortgage insurance premium go up again; it’s currently 1.75% of the amount borrowed (due at closing), and on the 11th jumbo loans — those above $625K — will go to 2.0%.
The good thing about FHA loans, especially for first-time (read: small saving account) buyers is that they only require a 3.5% down payment. The downside is that you have to pay insurance on the loan until you build up equity.
FHA protects itself with those insurance premiums, but the result is that what was supposed to be über-affordable is a lot more expensive.
We scored a nice-sized victory with a Supreme Court decision about RESPA violations.
It’s like this: Three couples got their mortgages through Quicken Loans. Quicken charged them each some extra fees — a “loan processing fee”, a “loan discount fee” — but didn’t (the couples said) actually provide anything for that extra money.
That, they said, violates RESPA, which A) bans kickbacks for referrals for settlement services, and B) covers how two parties have to divide payments. Taken together, they said, A+B meant Quicken couldn’t charge fees for doing nothing.
But SCOTUS disagreed.
The U.S. Senate is finally going to vote on changes to the National Flood Insurance Program that will extend it for five years, instead of just a month or two.
Barring yet another filibuster, it should pass and then be reconciled with a similar bill that already passed the House.
Senate Majority Leader Harry Reid said that, if necessary, they would extend the program by 60 days while both houses squabble work together to agree on the final bill, which President Obama is expected to sign.
From the “Oh, you don’t say?” department (via the Wall Street Journal):
So Virginia got about $66.5 million from the robo-signing settlement, ostensibly for use to help housing. Other states got more or less, for a total of $2.5 billion.
But a report from The New York Times ("Needy States Use Housing Aid Cash to Plug Budgets" and another from ProPublica ("Billion Dollar Bait & Switch: States Divert Foreclosure Deal Funds") found that a lot of that money is going to states’ general funds and is being used for anything but housing.
Back in November we told/warned you how FHA buyers were being blocked from buying a lot of condos. (FHA had de-certified every condo in the country, and required them all to reapply if they wanted prospective buyers to be eligible for FHA funding. But many condo board didn’t do this, as sellers were rather surprised to learn. Read that story here.)
Annnnnyway, now, reports Ken Harney in the Washington Post, FHA is looking at changing its rules for recertification, which will (hopefully) make it easier for condo associations to file the paperwork and get recertified.
What kind of hard-to-meet criteria did FHA have?
So the first tropical storm of the year has already formed — a bit ahead of what’s typical. Although Tropical Storm Alberto isn’t expected to make landfall, it does seem to portend an early — and possibly longer — hurricane season this year.
Luckily, the Federal government has renewed the National Flood Insurance Program, and all is well.
In fact, last week the House passed a one-month extension to the NFIP. One month. That’ll keep it in place till the end of June. The Senate is looking to pass something similar, and then discuss a five-year extension. (The House has already passed one of those.)
Behold, nonsense. Here are some headlines today:
- New Home Sales Slide in March
- US new-home sales off 7 percent in March, largest decline in a year
- New home sales plunge in March
This is known as bad reporting. The worst comes from Karl Case via Yahoo Finance: “The American Dream Of Buying A Home May Be Over.”
If any of these people bothered to actually check the facts, they’d know better. Instead, you’ve got a whole lotta nonsense.
New-home sales were actually up in March.
So there’s talk about the potential of a HARP 3.0 that would be available to even more distressed homeowners.
The Home Affordable Refinance Program (HARP) is a Obama-administration initiative (started in 2009) that allows homeowners who are current but underwater to refinance their loans at today’s crazy-low rates.
If you wanted to take advantage of HARP 1.0, you had to meet certain requirements: