Tag: fannie mae

Fannie Mae and Freddie Mac Define COVID-19 Forbearance Repayment Options

We previously talked about Forbearance as an option for anyone negatively impacted because of COVID-19. Forbearance is one of the most common options for those who cannot make their mortgage payments on time. Typically, once a loan is out of the agreed timeframe of forbearance, the borrower is expected to pay a “balloon payment,” or the total of all the payments missed plus the current payment. Fannie Mae and Freddie Mac have released their payment deferral plans to assist homeowners in forbearance.

Who is Eligible for Forbearance?

Freddie Mac states,

COVID-19 Payment Deferral will be available to homeowners with Freddie Mac loans starting July 1, 2020, at which time your servicer will begin evaluating your eligibility. Your servicer will contact you about 30 days before the initial forbearance plan is scheduled to end to determine which Freddie Mac assistance program is best or if additional forbearance is needed.
http://www.freddiemac.com/blog/homeownership/20200514_understanding_payment_deferral.page

Fannie Mae offers three different options for borrowers who have entered forbearance:

Homeowners who are experiencing a financial hardship caused by COVID-19 may request a forbearance plan through their mortgage servicer (the company listed on their mortgage statement). Homeowners must contact their mortgage company to request assistance. Under a forbearance plan, a homeowner may be able to temporarily reduce or suspend their mortgage payment while they regain their financial footing. Forbearance does not mean a homeowner’s payments are forgiven. Homeowners are still required to eventually fully repay their forbearance, but they won’t have to repay it all at once — unless they choose to do so.

Homeowners have several options to pay back unpaid amounts accrued during their forbearance period. Mortgage servicers will attempt to contact homeowners 30 days before their forbearance plan is scheduled to end to determine which assistance program is best for them at that time.

Full repayment: Homeowners have the option of immediately reinstating their loan, which means catching up on all the missed payments in a single payment if they can afford it. If a homeowner chooses to reinstate their loan, they can continue to pay their mortgage under the terms originally agreed to before they received forbearance.

Short-term repayment plans: Homeowners can gradually catch-up on the past-due amount over an agreed-upon time frame (for example, 3, 6, 9, 12 months). A portion of the past due amounts must be paid in addition to their existing monthly mortgage payments. Upon completion of their repayment plan, they can continue paying their mortgage under the terms originally agreed to before they received forbearance.

COVID-19 payment deferral: Homeowners can resume their regular monthly payments and the amount of their missed payments moves to the end of the loan term. Note: Mortgage servicers will begin offering the payment deferral repayment option starting July 1, 2020.

Loan modification: The original terms of the loan are changed in order to make the borrower’s monthly payments more manageable and address their ongoing hardship.

https://www.fanniemae.com/portal/media/corporate-news/2020/covid-payment-deferral-7018.html

Now that there is more explanation regarding ways to enter and come out of forbearance, we still want to caution borrowers to only enter in forbearance if a true economical hardship due to COVID-19 has occurred and you can no longer make your mortgage payments. Mortgage forbearance will go on your credit history, and it is still unclear if a mortgage forbearance will impact a person’s credit score, or by how much if it does.

If you or someone you know would like to discuss your options, contact your local Benchmark branch today.call me or contact me today.contact us today, and let our team take care of you.

New appraisal and origination requirement changes announced due to COVID-19

by Jason Haeger

Special measures have been taken to help account for challenges facing the real estate market due to COVID-19. Here are the temporary flexibilities in place to facility the continuation of transactions for buyers.

FHFA Announces Conforming Loan Limit Increase In 2019

by I Am Benchmark

The Federal Housing Finance Agency has announced that the maximum conforming loan limits for mortgages has increased.

In most of the country, the confirming loan limits will increase nearly 6.5%, from $453,100 to $484,350 for 2019. For most high-cost areas, where 115% of the local median home value exceeds the loan limit, the loan limit for one unit properties will be $726,525.

What Does This Mean for Homebuyers?

You can now purchase a home with a higher sales price using a conventional conforming loan through the FHFA regulated Fannie Mae or Freddie Mac.

The new limits are effective January 1st, 2019. Typically, the VA and Federal Housing Administration (FHA) are expected to adopt the same increased loan limits for 2019 for FHA and VA loans.

Source: https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Maximum-Conforming-Loan-Limits-for-2019.aspx

Conforming Loan Limits Set To Increase For 2018

by I Am Benchmark

Last year, the conforming loan limit was set to increased to $424,100 for this year (2017). Now, most of the United States will see an increase for single unit properties to $453,100 for 2018.

The HERA (Housing and Economic Recovery Act) indicates that the baseline conforming loan limit should be adjusted with the change in the average home price in the United States every year.

According to the FHFA (Federal Housing Finance Agency):

According to FHFA’s seasonally adjusted, expanded-data HPI, house prices increased 6.8 percent, on average, between the third quarters of 2016 and 2017. Therefore, the baseline maximum conforming loan limit in 2018 will increase by the same percentage.

A loan is considered “conforming” when it conforms to Government-Sponsored Enterprise (Fannie Mae and Freddie Mac) guidelines.

In light of the recent announcement of the S&P CoreLogic Case-Shiller Home Price NSA Index increase from last year, and FHFA’s seasonally adjusted, expanded-data HPI increase, this conforming loan limit adjustment is a welcome change for home buyers in high valuation markets.

To learn more about this increase, you can read the press release from the FHFA by going to https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Maximum-Conforming-Loan-Limits-for-2018.aspx.

Top 5 Financial Reasons To Buy Now

by I Am Benchmark

Increasing Prices

Over the last year, home prices have increased by 7.1%, according to CoreLogic’s latest Home Price Index (HPI) report. Over the next year, the HPI also predicts that prices will continue to rise at a rate of 4.9%. Clearly, we are long past the dip in home pricing. Home values are expected to continue to appreciate for years to come. In short, waiting no longer makes sense.

Anticipated Rising Mortgage Interest Rates

The Primary Mortgage Market Survey published by Freddie Mac shows that interest rates for a 30-year mortgage have drifted around 4%. Experts predict that rates will rise over the next year. The Mortgage Bankers Association, Fannie Mae, Freddie Mac, and the National Association of Realtors project that rates will increase by this time next year. An increase in rates is likely to cause your potential monthly mortgage payment to rise if you plan buy your next home.

Either Pay Yourself or Pay Your Landlord

Some renters who are uncomfortable with the obligation of a mortgage have not yet purchased a home. The reality is that unless you are living rent-free, every rent payment you make is paying your landlord’s mortgage. As a homeowner, your mortgage payment can be considered ‘forced savings’ in that it builds equity in your home that you can use to your advantage later in life. As long as you continue to rent, you will continue to build equity… for your landlord. When you buy a home, the advantage in housing payments is yours. For more on this, read Millionaire Tells Millennials To Buy A Home, published in January.

Rent Control

A fixed rate mortgage payment will not increase over the life of the loan. Rent, on the other hand, will likely continue its historic path. See the graph above from the U.S. Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers: Rent of primary residence, retrieved from FRED, Federal Reserve Bank of St. Louis: https://fred.stlouisfed.org/series/CUUR0000SEHA.

In short, buying a home can help you take control of your housing costs.

It Might Be The Right Time To Act

The cost of a home is determined by (1)the price of the home, and (2)the current mortgage rate. It appears that both are on the rise. But what if they stagnated? Would you wait? Consider the real reason you are buying and decide if you think it is worth waiting.

Whether you want to have a great place for your children to grow up, the choice to keep pets and room for them to roam, you want your family to be safer, or you just want to have control over renovations, now may be the time to buy. If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could result in significant savings.

If you decide that you are ready to act, find your loan officer and applyapply now.

Conforming Loan Limits Set To Increase For 2017

by I Am Benchmark

The Federal Housing Finance Agency has announced that it is increasing the maximum conforming loan limits for mortgage loans beginning in 2017. A mortgage loan is considered “conforming” when it is eligible to be acquired by Fannie Mae and/or Freddie Mac. (Mortgages are often sold to Fannie or Freddie so that a lender has the liquidity/money available to issue more mortgage loans for home buyers.)

The New Conforming Loan Limit

The current 2016 loan limit for single-unit properties or single family homes has remained at $417,000 for the last 10 years until recently. The FHFA has announced that the loan limit for single-family homes is increasing approximately 1.7% on January 1, 2017 from $417,000 to $424,100.

The changes were established because of The Housing and Economic Recovery Act of 2008 [pdf], which previously set the baseline loan limit at $417,000. The law also determined that after a period of housing pricing declines, the loan limit may not rise until prices return to pre-decline levels. It follows that since the FHFA is increasing the limit, it stands to reason that home pricing is back to pre-decline levels!
See also: Low Housing Inventory Driving Values Up – Benchmark (why the latest rise in home pricing is not another bubble)

FHA National Loan Limit is Up, Too

The FHA national loan limit “ceiling” will rise to $636,150, formerly set at $625,500. Additionally, the “floor” will increase to $275,665 from $271,050. The actual limit is variable by state and county. The “floor” is the lowest assigned limit, and the “ceiling” is the highest assigned limit for the nation as a whole.

The national loan limit is recalculated annually by the FHA from a percentage calculation of the national conforming loan limit. The calculated increase is positively correlated with rising home prices in high-cost markets.

What Does This Mean?

It means that the Department of Housing and Urban Development has taken notice of the trend of rising home prices. It also means that borrowers will be able to borrow more than they previously could without affecting the ability of lenders to maintain liquidity.

It’s a great time to buy!

Short Sale Assistance for Military Homeowners with Orders

by bmadmin

Washington, DC – Federal Housing Finance Agency (FHFA) Acting Director Edward J. DeMarco today announced changes to short sale policies that will make it easier for military homeowners with Fannie Mae and Freddie Mac loans to honor their financial commitments when they are required to move as part of their duty.

At a news conference with Consumer Financial Protection Bureau (CFPB) Director Richard Cordray, CFPB Assistant Director of Servicemember Affairs Holly Petraeus, and Deputy Assistant Secretary of Defense for Military Community and Family Policy Robert L. Gordon III, DeMarco announced that military homeowners who receive Permanent Change of Station (PCS) orders will be eligible to sell their homes in a short sale even if they are current on their mortgage. PCS orders often require quick moves and can create hardship for military homeowners who are underwater on their mortgages and therefore cannot sell their home without taking a loss. Previously, many service members felt their only option was either to maintain financial obligations on two residences or to default on their mortgage.

“It is in everyone’s interest for the men and women serving in our armed forces to focus on the important job they are doing defending our country, rather than worry about the maintenance and leasing of a property in another jurisdiction,” said DeMarco. “These Fannie Mae and Freddie Mac policy changes, in combination with related guidance last fall, should now provide military homeowners with access to the immediate and automatic full range of foreclosure alternatives.”

DeMarco commended the CFPB and the prudential regulators – the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union Administration, and the Office of the Comptroller of the Currency – for issuing a new interagency guidance that reinforces for mortgage servicers the importance of treating military homeowners with PCS fairly.

Under the new policy Fannie Mae and Freddie Mac will not pursue a deficiency judgment or any cash contribution or promissory note from members of the military with a change in duty station for any property purchased on or before June 30, 2012. Service members must have a Fannie Mae or Freddie Mac loan to be eligible.

Last year Fannie Mae and Freddie Mac issued guidance to mortgage servicers confirming PCS orders as a qualifying hardship for forbearance and loan modifications.

Service members can check Fannie Mae or Freddie Mac websites to see if their loans are held by them or they can call hotlines for military homeowners at 1-877-MIL-4566 or 1-800-FREDDIE.

Higher Home Prices Expected by Consumers in 2012

by bmadmin

Higher home prices are expected by 33% of consumers over the next year.

Fannie Mae’s monthly housing survey indicated 5% more people expect home prices to increase this month over the 27 percent surveyed last month who thought prices would increase this year.

Nearly half of consumers expect higher rental prices as well, the highest number registered by Fannie Mae since its monthly tracking began in June 2010. Americans’ rental price expectations for the next year continue to rise, reaching their record high level for the Fannie Mae survey this month.

The percentage of respondents who say it is a good time to buy rose by three points to 73 percent, the highest level in more than a year, while the percentage of respondents who say it is a good time to sell rose one point to 14 percent this month.

Consumers’ confidence about their own finances is stabilizing, with 44 percent expecting an improvement over the next year.

Higher Mortgage Rates Expected

There is an increasing share of consumers expecting both higher mortgage rates and home prices over the next 12 months.

Doug Duncan, Vice President and chief economist of Fannie Mae says, “Americans’ rental price expectations for the next year continue to rise, reaching their record high level for our survey this month.”

Duncan says, “Some may feel that renting is becoming more costly and that home ownership is a more compelling housing choice. Conditions are coming together to encourage people to want to buy homes.”

While the “sales of existing homes in January and February marked the strongest start to a year since 2007,” according to the combined Housing and Urban Development (HUD)/Treasury statement. “Data on home prices changed little from the previous month – marking a fifth month of seasonal lows.”

For further Fannie Mae survey findings, visit the Fannie Mae Monthly National Housing site.

Survey Shows Home Prices and Rent Rates Expected to Increase

by bmadmin

We report on Fannie Mae’s Quarterly National Housing Survey every ninety days. Fannie Mae also does a monthly survey covering different aspects of the housing market.

Here are some record numbers we found interesting in Fannie Mae’s March report (emphasis added).

Thirty-three percent of respondents expect home prices to increase over the next 12 months, the highest level over the past 12 months.
The percentage of respondents who say it is a good time to buy rose to 73 percent,the highest level in over a year.
Forty-eight percent of respondents think that home rental prices will go up, the highest number recorded to date.
On average, respondents expect home rental prices to increase by 4.1 percent over the next 12 months, the highest number recorded to date.

Doug Duncan, chief economist of Fannie Mae, capped the report off by stating:

“Conditions are coming together to encourage people to want to buy homes. Americans’ rental price expectations for the next year continue to rise, reaching their record high level for our survey this month. With an increasing share of consumers expecting higher mortgage rates and home prices over the next 12 months, some may feel that renting is becoming more costly and that homeownership is a more compelling housing choice.”

This article is courtesy of our friends at Keeping Current Matters.

The Survey Shows Americans Continue Aspiring For Homeownership

by bmadmin

Quarterly National Housing Survey Shows that Americans of All Backgrounds Continue to Have Strong Aspirations to Own a Home

Attitudes About Homeownership as an Investment, Financial Constraints, and Mortgage Accessibility May Stand in the Way of Americans’ Purchase Decisions

Pete Bakel | 202-752-2034

WASHINGTON, DC – Fannie Mae’s (FNMA/OTC) latest quarterly National Housing Survey focuses on the state of homeownership aspirations among Americans across all demographic groups. The survey finds that despite the recent housing crisis, most Americans continue to believe that owning their home is preferable to renting it. The data also indicate that while financial constraints and employment concerns may be keeping potential homebuyers on the sidelines in the near term, future improvements in employment and personal finances, a pickup in interest rates in response to stronger economic growth, and stabilizing home prices may move Americans to act on their aspirations in coming years.

Across all education levels, Americans say owing makes more sense than renting. This belief is held consistently across all demographic groups.
Nearly two-thirds of current renters say that they will buy a house at some point in the future.
Non-financial factors such as safety and quality of local schools continue to be the top reasons for buying a home across all income groups.
African-Americans and Hispanics are more likely to cite various benefits, such as buying a home as a way to build wealth, homeownership as a symbol of success, and civic benefits.

“In spite of the impact of the housing crisis on home values and homeownership rates across the country, Americans by and large still hope to become homeowners,” said Doug Duncan, vice president and chief economist of Fannie Mae. “Some may not be financially positioned to own a home in the near future, but Americans may begin to revisit that aspiration as employment and household balance sheets improve over the coming years.”

“A point of concern for the industry is that some consumers find the mortgage shopping process difficult to navigate,” Duncan continued. “If potential homeowners avoid the process because they believe it to be too complex, we will likely see a continued impact on homeownership rates.”

Overall, certain groups (renters, those with lower levels of education, people with lower incomes, African-Americans, and Hispanics) cite potential difficulties in getting a mortgage. Specifically, those renting today are most likely to cite poor credit, complexity of process, and bad economic times as major reasons not to buy a home.

Renters are consistently more likely than mortgage borrowers to think it would be difficult for them to get a home.
African-Americans and Hispanics are more likely to indicate that getting a mortgage is difficult, regardless of income level.
Groups with lower levels of education are more likely to say it would be difficult for them to get a mortgage than groups with higher levels of education.
Renters cite financial reasons as the major factors for not buying a home.
Hispanic and African-American renters are most likely to cite bad economic times and overall complexity of process as major reasons not to buy a home.
Lower income Americans also are consistently more likely to cite income and credit history as obstacles to getting a mortgage, and are less confident they are getting adequate home loan information.
Hispanics are less confident than other groups about receiving information they need to choose the right mortgage.

Moreover, attitudes about homeownership as an investment, financial constraints, and mortgage accessibility may mean that more Americans choose not to act on their aspiration for homeownership, thus potentially leading to lower homeownership rates.

The margin of Americans believing homeownership has the highest investment potential has declined over the past several years.
At the same time, the perceived safety of owning a home as an investment has trended downward, reaching a low of 63 percent in the fourth quarter of 2011.
In turn, groups with higher levels of education and higher incomes are more likely to think buying a home is a safe investment.

The fourth-quarter 2011 National Housing Survey focus on the state of homeownership aspiration is based on more than 3,000 interviews from October 3, 2011 to December 20, 2011 among homeowners and renters to assess their attitudes toward owning and renting a home, confidence in homeownership as an investment, the current state of their household finances, views on the U.S. housing finance system, and overall confidence in the economy. Data findings for this topic also are based on similar surveys conducted throughout 2011, 2010, and in December 2003. Interviews were conducted by Penn Schoen Berland, in coordination with Fannie Mae.

For more detailed findings from the survey, click here.

Fannie Mae exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America’s secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to home buyers. Our job is to help those who house America. Follow us on Twitter: http://twitter.com/FannieMae.