FHA, through its National Servicing Center, is looking to close the education and communication gap between FHA servicers and real estate professionals to aid FHA borrowers in the preforeclosure process (otherwise known as the short sale). The webinars are designed for all real estate professionals. FHA is offering a series of eight regional webinars to ensure real estate agents and their clients have the most up-to-date information on the HUD pre-foreclosure program and other resources available to reduce foreclosures for borrowers. The webinars begin May 16 and have the following objectives:

• Identify REALTOR® “Best Practices when utilizing FHA’s Preforeclosure Program.

• Describe how HUD Servicers are required to apply loss mitigation tools to customers in need.

• Identify the benefits, features, and qualification criteria for FHA’s Preforeclosure Program.

• Recognize the difference between the market/appraised value for a property and the minimum acceptable net sale proceeds.

Housing Wire – The Federal Housing Finance Agency delayed its decision to allow principal reduction on Fannie Mae and Freddie Mac mortgages.

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The Federal Housing Finance Agency (FHFA) has streamlined the short sale process to help more home owners avoid foreclosure. The move calls for Fannie Mae and Freddie Mac to develop enhanced and aligned strategies for facilitating short sales, deeds-in-lieu, and deeds-for-lease.

The FHFA’s directive calls for servicers to:

Review and respond to requests for short sales within 30 calendar days from receipt of a short sale offer and a complete borrower response package;

Provide weekly status updates to the borrower if the short sale offer is still under review after 30 calendar days; and

Make and communicate final decisions to the borrower within 60 calendar days of receipt of the offer and complete borrower response package.

By the end of this year, Fannie Mae and Freddie Mac will announce additional enhancements that address borrower eligibility and evaluation, documentation simplification, property valuation, fraud mitigation, payments to subordinate lien holders, and mortgage insurance.

U.S. house prices rose 0.3 percent on a seasonally adjusted basis from January to February, according to the Federal Housing Finance Agency’s monthly House Price Index. While prices in January were unchanged according to initial estimates reported in the last HPI release, the January result has been revised downward to reflect a 0.5 percent decrease. For the 12 months ending in February, U.S. prices rose 0.4 percent, the first annual increase since the July 2006 – July 2007 interval. The U.S. index remains 19.4 percent below its April 2007 peak and is roughly the same as the January 2004 index level.

The FHFA monthly index is calculated using purchase prices of houses backing mortgages that have been sold to or guaranteed by Fannie Mae or Freddie Mac.

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As of April 1, potential borrowers with ongoing credit disputes totaling more than $1,000 are no longer eligible for mortgages insured by the FHA.

Under the rule, borrowers must either pay off the outstanding balance on these collections accounts or document a payment arrangement that the lender must then submit to the FHA before closing. The payment arrangement will be counted into the debt-to-income ratio for the new home loan.

The rule excludes disputed accounts from more than two years ago, along with those related to theft. But the lender must document an identity theft or police report on the fraudulent charges.

An FHA spokesman said the rule was designed as another protection for the FHA emergency fund. The fund levels slipped to 0.2 percent of at-risk insurance last year, well below the 2 percent mandated by Congress. The FHA raised insurance premiums on April 1 as well to boost the fund by $1 billion.

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Mercury News – Fees charged on mortgages backed by the Federal Housing Administration are set to change this spring; they’ll go up for some and down for others.

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U.S. house prices were unchanged on a seasonally adjusted basis from December to January, according to the Federal Housing Finance Agency’s monthly House Price Index. The previously reported 0.7 percent increase in December was revised downward to reflect a 0.1 percent increase. For the 12 months ending in January, U.S. prices declined 0.8 percent. The U.S. index is 19.2 percent below its April 2007 peak and roughly the same as the February 2004 index level.

For the nine census divisions, seasonally adjusted monthly price changes from December to January ranged from a decrease of 1.7 percent in the West South Central division to an increase of 4.7 percent in the West North Central division.

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C.A.R. and NAR applaud the Federal Housing Finance Agency for issuing a final rule to restrict Fannie Mae, Freddie Mac, and the Federal Home Loan Banks from investing in mortgages encumbered by private transfer fee covenants.

“NAR has long been vocal in its opposition to private transfer fees since there is virtually no oversight on where or how fee proceeds can be spent, on how long a private transfer fee may be imposed, or on how the fees should be disclosed to home buyers – and this often places an inappropriate drag on the transfer of property,” said NAR President Moe Veissi.

“To that end, we fully support FHFA’s decision to ban private transfer fees, which we believe increase the cost of homeownership, provide no benefit to home buyers and do little more than generate revenue for developers or investors.”

C.A.R. is pleased to see the Federal Housing Finance Agency take a strong position on this issue, and is hopeful this final rule will prevent organizations from threatening homebuilders with litigation until a private transfer tax benefiting their group is created.

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Los Angeles Times – The Federal Housing Administration (FHA) plans to impose significant restrictions on the amount of money that sellers can contribute at closing in the near future.  The FHA also will be raising its mortgage insurance premiums during the coming weeks, increasing charges for new purchases across the board.

Making sense of the story

• One reason for the increase in fees is that over the last six years, the number of FHA loans used by buyers has increased significantly.  The housing program is financing 40 percent or more of all new-home purchases in some areas and is a crucial resource for first-time buyers and moderate-income families.  This is especially because of the low 3.5 percent down payment required for most FHA loans.

• During this span of rapid growth, the FHA’s insurance fund capital reserves have steadily deteriorated – far below congressionally mandated levels.  And delinquencies have been increasing.  As a result, the FHA is under the gun to get its own house in order, cut insurance claims, and rebuild its reserves.

• Under the changes, the FHA will lower its seller concession cap to 3 percent of the home price or $6,000, whichever is greater.  Currently, the FHA allows up to 6 percent of the price of the house to go toward buyers’ closing costs.

• Beyond that change, the FHA also plans significant increases in insurance premiums – upfront premiums will rise to 1.75 percent from 1 percent, effective April 1, and annual premiums will increase by 0.1 percent on all loans under $625,000 and 0.35 percent on mortgage amounts above that, effective June 1.

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The Federal Housing Finance Agency (FHFA), the agency that controls Fannie Mae and Freddie Mac, has a serious effort under way to remove or minimize some of the major hurdles associated with short sales and to put those changes in the field as soon as this fall.

Officials at the FHFA have said they are actively seeking input from lenders, servicers, REALTORS®, investors and housing counselors about how to speed up short sales on loans connected with Fannie and Freddie.

Officials from NAR, who have already met with the agency’s special short-sale task force, confirm that the effort is for real and promise potentially significant reforms. FHFA officials say their deadline to wrap up their review of short-sale obstacles is June 30, and they plan to announce detailed improvements to the process no later than Sept. 30.

FHFA is considering making changes to the following:
•    Second liens.
•    Mortgage insurers
•    Mandatory timelines
•    Valuation issues
•    Staffing

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