Tag: freddie mac

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.

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.

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.