Any Reality to the Housing and Economic Recovery Act of 2008 (loan, real estate)

[olecapt]

Well been reading about it.

But don't hear anything about implementation.

Now I know it starts October 1 for at least parts...but one would expect some PR puffs from the lenders or the homeowner assistance guys or somebody.

Instead it appears to be a black hole. Not a sould or vowel escapes the dark black void.

Anybody know anything contradictory?

Any great sites for the act? Should rate some sort of super blog.

[rcarrillo]

Thats cause its all hype, not much substance. How many FHA Secure loans have you done since that program came out?

[VictorBurek]

This program will help very few people, but the politicians will be able to say they are doing something about it.

[olecapt]

I of course value your opinions. I am looking however for reality. Still none of that.

[rcarrillo]

Originally Posted by olecapt

I of course value your opinions. I am looking however for reality. Still none of that.

That is reality. Here are the facts:


FHA back to flat 1.5% UFMIP and .5% annual MIP. Downpayment from 3% to 3.5%. No more seller funded DPA.

Conforming loan limits are now greater of $417,000 (same as before) or higher in high cost areas (up to $625,500). Not really a change, just making the temporary increases permanent.

Tax credit of $7500 or 10% of sales price. Only applies to FTHB, its an interest free loan, not free money and it phases out at higher incomes.

New all originator nationwide registry system, doesn't get any PR but its an important factor. I actually like this and it should have been done 10 years ago, as soon as the technology was there to do so. Standards still are too low, but its a start to have a list of people in the business that are licensed.

FHA refi program: lenders have to write down the loans to 90% of appraised value and pay FHA ~3% of the loan amount fee to take it off their hands. Not sure what the borrowers need to qualify. I am sure like FHA Secure it won't help many.

And of course... US Treasury has the power to bail out Fannie/Freddie with unlimited amounts of money.


Most of it sounds nice, but won't do anyone much good. Its "mental help" for all the "whiners" in the US. Really, it will win politicians some votes and maybe help a few families, but overall the effects will be minimal other than the proposed bail out of Fannie/Freddie that could help or destroy the US economy.

Join NAMB, MBA, All Regs or your state mortgage/real estate association and you can get weekly emails and monthly magazines. It costs at most $150/year and everyone in the industry or interested in real estate should make the investment. I know, the free info on here is cooler... but its better to get the facts on there than trust us to know what we are talking about

[Daddys///M3]

Originally Posted by rcarrillo

That is reality. Here are the facts:


FHA back to flat 1.5% UFMIP and .5% annual MIP. Downpayment from 3% to 3.5%. No more seller funded DPA.

Conforming loan limits are now greater of $417,000 (same as before) or higher in high cost areas (up to $625,500). Not really a change, just making the temporary increases permanent.

Tax credit of $7500 or 10% of sales price. Only applies to FTHB, its an interest free loan, not free money and it phases out at higher incomes.

New all originator nationwide registry system, doesn't get any PR but its an important factor. I actually like this and it should have been done 10 years ago, as soon as the technology was there to do so. Standards still are too low, but its a start to have a list of people in the business that are licensed.

FHA refi program: lenders have to write down the loans to 90% of appraised value and pay FHA ~3% of the loan amount fee to take it off their hands. Not sure what the borrowers need to qualify. I am sure like FHA Secure it won't help many.

And of course... US Treasury has the power to bail out Fannie/Freddie with unlimited amounts of money.


Most of it sounds nice, but won't do anyone much good. Its "mental help" for all the "whiners" in the US. Really, it will win politicians some votes and maybe help a few families, but overall the effects will be minimal other than the proposed bail out of Fannie/Freddie that could help or destroy the US economy.

Join NAMB, MBA, All Regs or your state mortgage/real estate association and you can get weekly emails and monthly magazines. It costs at most $150/year and everyone in the industry or interested in real estate should make the investment. I know, the free info on here is cooler... but its better to get the facts on there than trust us to know what we are talking about

+1.

I also agree that the national mortgage agent licensing system is very important. I definitely look forward to higher licensing standards.

Let's not forget that the FHA refi's are totally servicer voluntary. Just because they are able to does not mean that they will be willing to. Let's say a home bought 2 years ago at $200,000 (100% loan to value). The current market value is $150,000. The servicer would have to write down the loan to $135,000, plus pay FHA $4500, leaving a new loan of $130,500. How many lenders will be willing to voluntarily do this? I can't answer that question. What if the borrower bought with a stated income loan (very likely)? Will they still qualify for the FHA refi? I highly doubt it.

Let's not forget the true intent of this bill. It is a bank bailout and a GSE backstop, effectively raising our national debt to over $10 trillion (that's alot of zeros) ot backstop FNMA and FHLMC. There is also quite a bit of pork in it, from what I've seen, including subsidies and tax breaks to companies in the energy sector.

[rcarrillo]

Originally Posted by Daddys///M3

+1.

I also agree that the national mortgage agent licensing system is very important. I definitely look forward to higher licensing standards.

Let's not forget that the FHA refi's are totally servicer voluntary. Just because they are able to does not mean that they will be willing to. Let's say a home bought 2 years ago at $200,000 (100% loan to value). The current market value is $150,000. The servicer would have to write down the loan to $135,000, plus pay FHA $4500, leaving a new loan of $130,500. How many lenders will be willing to voluntarily do this? I can't answer that question. What if the borrower bought with a stated income loan (very likely)? Will they still qualify for the FHA refi? I highly doubt it.

Let's not forget the true intent of this bill. It is a bank bailout and a GSE backstop, effectively raising our national debt to over $10 trillion (that's alot of zeros) ot backstop FNMA and FHLMC. There is also quite a bit of pork in it, from what I've seen, including subsidies and tax breaks to companies in the energy sector.

Exactly my point on the FHA refinance program. How many FHA Secure loans have all the bankers and brokers on this site done since it started?

To qualify for the program, basically the borrower was either swindled by their lender or they improved their situtation dramatically. That is because they have to qualify for the new loan full doc, with actual tax returns not a 1099 alone or bank statements showing deposits every month. They also need decent credit, with no major issues.

Many of the people with the worst problems took a stated income loan, used alternative documentation or did not have the credit, assets or other requirements necessary for an FHA loan. Unless they did and were deceived into a subprime loan OR they improved their position enough they will not be approved by FHA.

Even if they can be, the lender might not be willing to let them go at that loss as you explained.


The bill really is to bail out Fannie/Freddie. The whole FHA, tax credit and registry is just the sugar to make the public swallow the pill. You tell them we are giving them tax breaks and options to save their homes and punish lenders by regulating them and they cheer for it.... meanwhile the real intent is to prop up Fannie/Freddie with US Treasury money.

[Daddys///M3]

If you read the Senate Banking Committee's summary of the bill, you will notice that they mention nothing of the GSE backstop or the increase in the national debt.

http://banking.senate.gov/public/_fi...ActSummary.pdf


Here is a link to the Project Vote Smart's summary of H.R. 3221. I have to admit at first I was confused when I read this, and still am. I have not seen anything in H.R. 3221 regarding energy policy, but according to PVS these provisions are in the bill.

H.R. 3221 - Summary: Housing and Economic Recovery Act of 2008 (GovTrack.us)

I have no idea what electrical suppliers or the Secretary of Energy have to do with housing markets, HUD, or the GSE's. I think that PVS may have bills mixed up, at least I hope so.

[brokerdave]

yea, i have been trying to figure this out too. is the bill going to pay the difference of the write down? what is the purpose for the 300 billion? ive been trying to read everything on this, but cant find ****. and i am really not interested in reading pages upon pages of the bill in legel terms. or is the 300 to cover there insurance? i dont know, lol.

[olecapt]

Originally Posted by brokerdave

yea, i have been trying to figure this out too. is the bill going to pay the difference of the write down? what is the purpose for the 300 billion? ive been trying to read everything on this, but cant find ****. and i am really not interested in reading pages upon pages of the bill in legel terms. or is the 300 to cover there insurance? i dont know, lol.

Hang on BrokerDave The young hot shots are going to explain it to us all...I am still of the opinion that nobody knows nothing...at least as far as the mortgage relief goes. But now we are getting some interest maybe we will stumble upon someone who has some hints as to what may traspire.

As to the energy stuff that may have been the bill from the last congress and it has gotten mixed in. So that and it is obviously some sort of error. (Or this bill is a whole lot weirder than I gave it credit)