ShareIn This Issue
FHA Programs (Federal Housing Administration)
NAR Calls for Expansion of FHA’s 203(k) Program
Government - Sponsored Enterprises
FHFA Releases Statement on GSE Guarantee Fee Increase
Qualified Mortgage (QM)/Ability to Repay
Former Ohio Attorney General Richard Cordray takes over Helm of CFPB
Realtor Insider DC News and Events
Government Offers to Review Foreclosure Handling in More than 4 Million Individual Cases
FHA Programs (Federal Housing Administration)
NAR Calls for Expansion of FHA’s 203(k) Program
Moe Veissi, the 2012 President of the National Association of Realtors, sent a letterpdf to Shaun Donovan, Secretary of Housing and Urban Development (HUD) requesting that investors be permitted to participate in the Federal Housing Administration’s (FHA) Section 203(k) Rehabilitation Mortgage Insurance Program to purchase vacant and foreclosed properties in need of significant rehabilitation. Amending the 203(k) Program will help restore vibrant housing markets and neighborhoods across the country and people will be put to work fixing these homes.
FHA’s 203(k) Program allows homebuyers and homeowners to a) purchase a house including the cost of its rehabilitation through a single mortgage, or b) finance the rehabilitation of their existing home. Section 203(k) fills a unique and important need for homebuyers in another way as well. Section 203(k) insured loans save the borrower’s time and money, and also protect lenders by allowing them to have the loan insured even before the condition and value of the property may offer adequate security.
Megan Booth, 202-383-1222
Jerome Nagy, 202-383-1233
Government - Sponsored Enterprises
FHFA Releases Statement on GSE Guarantee Fee Increase
On December 23rd, 2011, President Obama signed legislation extending the payroll tax reduction and requiring the Federal Housing Finance Agency (FHFA, the conservator of Fannie Mae and Freddie Mac (the GSEs) to raise GSE guarantee fees (g-fees) by at least ten basis points.pdf In addition, the new law requires The Department of Housing and Urban Development (HUD) to establish and collect annual premiums, in addition to existing premiums, of ten basis points of the unpaid principal balance on all FHA loans. Despite NAR's strong opposition to the diversion of housing resources to pay for non-housing uses,pdf the increase in g-fees is being used to pay for the extensions. HUD is required to phase in the increase over two years, as it determines appropriate, and will use the premium increase to shore up the FHA insurance fund. FHFA has directed Fannie Mae and Freddie Mac to increase their guarantee fees effective April 1, 2012. The increases will remain in effect through September 30, 2021. Lenders who choose to pass this increase on to borrowers will likely increase the rate offered to a borrower by .1% sometime before April 1, 2012. Several sources have placed the increase in cost at approximately $4000 - $5400 over 30 years on a $200,000 loan. On a monthly basis, the increase will amount to an approximately $11-15 increase.
Charles Dawson, 202-383-7522
Jerome Nagy, 202-383-1233
Tony Hutchinson, 202-383-1120
Qualified Mortgage (QM)/Ability to Repay
Former Ohio Attorney General Richard Cordray takes over Helm of CFPB
On Thursday, January 5, 2011, President Obama installed former Ohio Attorney General Richard Cordray as Director of the Consumer Financial Protection Bureau (CFPB) using a recess appointment. While the appointment procedure has been questioned, it is fully expected that Cordray will hit the ground running in dealing with the numerous issues on the plate of the CFPB.
Key issues ahead for CFPB include the Qualified Mortgage (QM) rule and the associated ability to repay provisions governing so called "safe mortgages." Also, CFPB is in the midst of a broad effort to combine Real Estate Settlement Procedures Act and Truth in Lending Act disclosures, forms, and associated regulations. NAR has been actively working with CFPB on these and other regulatory issues in order to ensure that consumers have access to affordable and widely available mortgage credit and that any changes are not needlessly burdensome to consumers or real estate professionals.
Kenneth Trepeta, 202-383-1294
Charles Dawson, 202-383-7522
Tony Hutchinson, 202-383-1120
Realtor Insider DC News and Events
Government Offers to Review Foreclosure Handling in More than 4 Million Individual Cases
Borrowers who faced foreclosure in 2009 or 2010 may be eligible for a free independent review of their foreclosures. The reviews which were ordered by the Office of the Comptroller of the Currency (OCC) and the Federal Reserve in April of 2011 cover foreclosures handled by most major loan servicers. They are intended to determine whether borrowers suffered financial injury due to improper handling of the foreclosure action and, if so, how much compensation should be paid.
OCC has mailed 4 million letters to likely eligible borrowers notifying them of this opportunity. Other borrowers who believe they are eligible for this review of their foreclosure can request application forms by calling (888) 952-9105. Applications are due by April 30, 2012.
William Gilmartin, 202-383-1109