The lastest Fannie Mae fallout- FIRST HAND!

Last last week several large financial institutions put on delay on up coming foreclosure actions, the details for reason can be viewed here in an article from the Washington Post. The article states “To be certain affidavits have followed the correct procedures, Bank of America will delay the process in order to amend all affidavits in foreclosure cases that have not yet gone to judgment,” spokesman Dan Frahm said in a statement. However I found out first hand this is affecting MORE then just foreclosures that have not yet gone to judgement.

3 weeks ago a client of mine drafted an offer to Fannie “JP Morgan Chase” a bank that also put on this hold, and had it acceptedwith a closing date of next Thursday October 14th. The filing of foreclosure on the property took place in March of 2010 and was filed at the Hamilton County auditors office around the 20th of that same month. The foreclosure had already gone to judgement, then on Tuesday I receive an email from the sellers Fannie May via JP Moran Chase’s representatives that the close was on hold and needed to be extended until March 2011! My client, who was financing the purchase had locked in to an amazing interest rates and was beside themselves at what to do. The seller offered a full refund of the 5% down fee that collected on the contract agreement day and was in full understanding if the buyer wanted to walk away.

At this point I started to get down to business, not to focus on the problem but to uncover the solution!! I started by calling the County to make certain the title had been file, and recorded property and it was. I then called the title company assigned by the seller Fannie Mae via JP Morgan Chase. The closing coordinator assigned to our case was at a complete gasp, she had also be notified a the hold late in the day on Monday. She explain 45 pending closing on her desk had been put on hold, I respond “shew only 45 that sounds like a lot”, she then said “NO not only 45, 4500!” I couldn’t believe it, the title company is exclusive to cases in Ohio for Fannie Mae and all there foreclosed upon PENDING sale contract cases had been put on hold. My next call was to the listing agent, a well-known REO agent in our area who specializes in this type of transaction. He himself is difficult to get a hold of and not 10 mins after I left a message he called me direct, in a frantic vibration. He described to me the issue, all his business was on HOLD, he explain I can’t close a thing, he said “most will close within 60 days that are already pending, but some it will be upwards of 6 months”. He told me this all came down between start of business Monday Oct 5th and mid day Oct 6th. Talk about losing your income for half a year.

I stayed positive and my final call went to my beloved title attorney here in Cincinnati. The man who has the right thing to say about any situation related to real estate. Like always when I call him, I explained my situation in detail, I explained what my research had uncovered. He described to me the directions he had been given about the situation “We were told it only affects future foreclosure, this is new to me”, keep in mind this is a real estate TITLE attorney who owns his own title agency. This news was fresh and still his, but what really caught me off guard what the advice he gave me to solve the problem “Kris, I apologize but you are helpless, there is no solution”.

And so we wait…..

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The Improving Mortgage Rates at a closer glance

We can all breathe a bit easier going into the weekend after we saw the stock market bounce back late Friday and end on a positive note after watching the market sell off dramatically all week!   The good news to us in the Real Estate profession when the stock market sells off, investors look for safety in treasuries which allows for mortgage rates to improve.  

30 year fixed rates were averaging 4.75 to 4.875%, on Friday (average because final rates are based upon loan program, loan to value and credit scores).

With the senate passing there version of financial reform…it looks like we could see a bounce in equities this week which could push rates back to those 5.00% levels once again.

One thing that is very clear with the senate’s version are the days of qualifying for mortgage loans with little to no documentation could be over for good.   They made it very clear that lenders must consider an applicant’s income, assets and credit history when determining whether someone can qualify for a mortgage loan!   Seems to make sense, however this was clearly stated in the bill.

Over-all rates continue to remain low and do not look to increase dramatically anytime soon…so this will allow for buyers to purchase homes at historically low rates, even though the tax credit has expired!

Have a great weekend.

Market Update-Interest Rates

 

Not a great week for the stock market, however the good news is that on Friday afternoon the market reversed its downward trend and ended back up over 10,000 by the close.   This could be a good sign going into Monday’s trading as buyers came back into the market at the end of the day!
 
The same could be said for the Real Estate market…many first time buyers are now beginning to call again, in order to take advantage of the tax credit program.
 
Rates continue to stay very low…conventional loans averaging 4.875 to 5.00% and FHA/VA rates averaging 5.00 to 5.125%
 
I say average as there are so many more components that go into an interest rate today; such as credit score, down payment and loan to value…however no matter what an individual buyer’s situation rates are still at historical lows!
 
Many are concerned with all of the regulatory changes and that it will take much longer to close a transaction, however you can still close a loan in 3 to 4 weeks (or less) if it is done right and disclosed properly…we just closed a VA loan last month in less than three weeks…so closing times really have not increased like many had thought and predicted.
 
Have a great weekend!

Market Update-Lenders changing HUDs rehab guidelines

 

In an effort to help move foreclosed properties more quickly HUD announced on Friday the removal of 90 day waiting period to repurchase homes utilizing FHA financing!
 
This information just came out yesterday and more details to follow…however the following is a quick review;
 
–  Effective February 1st, 2010
–  All transactions must be arms-length in nature
–  Seller must hold title to the property
–  No previous flipping of the property during the last 12 months
–  Property was marketed openly and fairly
 
Key issue will be when property has increased 20% or more since title transferred;
 
–  Supporting documentation will need to verify sufficient legitimate renovation or appraiser needs to justify and explain increase in value
–  Property inspection will be required by lender
 
Again, this just was announced…please see attached from HUD and as I have more details will forward to everyone.

Published in: on January 19, 2010 at 07:00  Leave a Comment  
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