Feds move to steamline help process for homeowners

AP via Yahoo News ^ | 11/11/08 | Alan Zibel

[marshmallow]

Government, mortgage industry to announce assistance effort for Fannie Mae, Freddie Mac loans

WASHINGTON (AP) -- In the most sweeping effort so far to help troubled homeowners, the federal government and the mortgage industry on Tuesday will announce a plan to streamline the assistance process for hundreds of thousands of delinquent loans held by Fannie Mae and Freddie Mac.

The Federal Housing Finance Agency, which seized control of the two mortgage finance companies in September, scheduled a press conference for 2 p.m. EST. Scheduled to attend were officials from the Treasury Department, Wells Fargo & Co., the Department of Housing and Urban Development and Hope Now, an alliance of mortgage companies organized by the Bush administration last year.

An industry official who worked on the plan said the new approach will allow lenders to modify more delinquent loans by establishing broad criteria to speed up the process. The official spoke on condition of anonymity because details had not been announced.

The new initiative will likely have tremendous importance because Fannie Mae and Freddie Mac own or guarantee about half of U.S. home loans.

To qualify, borrowers would have to be at least three months behind on their home loans, and would need to have home loans worth at least 90 percent their house's value. The interest rate or principal amount of the loan would be reduced so that borrowers would not pay more than 38 percent of their income on housing expenses, the industry official said.

The announcement comes as major banks are stepping up their efforts to curtail losses from souring mortgages. More than 4 million American homeowners with a mortgage were at least one payment behind on their loans at the end of June, and 500,000 had started the foreclosure process, according to the most recent data from the

[justlurking]

Steamline? Is that like the Titanic?

Or did you mean steamclean? Maybe that's what is really needed.

[realdifferent1]

Check out the 'members' of Hope NOW here.

[marshmallow]

Typo is in the original article......:-)

[org.whodat]

An industry official who worked on the plan said the new approach will allow lenders to modify more delinquent loans by establishing broad criteria to speed up the process.

Here comes you are entitled to a home you cannot and never will be able to afford. The government wiil be building a slum near you asap.

[NetSurfer]

borrowers would not pay more than 38 percent of their income on housing expenses

The devil is in the details. First you must be delinquent, then you must agree to the fine print. Surely there is some kind of government-required "payback" when someone eventually decides that they want to sell their house to a willing buyer. What will that be - perhaps 50% of the net profit (if any)?

Good luck getting "willing buyers". Who would play by the rules now, when breaking them up to this point has been so very profitable? Who would bother putting down 30% (required in my area) on homes that are still overpriced? As interest rates increase for prime borrowers, and housing prices continue to tank, when do you initiate bailout #2 for those who believe that they negotiated prematurely? Bailout #3? Can you say MORAL HAZARD?

More government genius. Have fun with the housing rebound, Washington. Should be coming in about 20 years.

[Porterville]

“To qualify, borrowers would have to be at least three months behind on their home loans, and would need to have home loans worth at least 90 percent their house's value. The interest rate or principal amount of the loan would be reduced so that borrowers would not pay more than 38 percent of their income on housing expenses, the industry official said. “

Most people aren't delinquent... and many are underwater...

So, when do the non-delinquents get some “adjustments” ?

[DancingMyRainbow]

Has anyone done a comparison as to how the foreclosures shake out, red state to blue state? Because to be honest, I’m not seeing any of this where I live. I have friends in just about every economic level and they’re all doing fine, some struggling a bit but nothing close to forclosure. I haven’t heard of friends of friends of friends being in forclosure.

So I’m just wondering if forclosures are more prevalent in blue states as opposed to red states, or maybe I just don’t get out enough.

[Earthdweller]

Uh oh..meant this for another thread ...obviously! ROTFL! Sorry!

[blam]

This program = free houses for Black people.

[Doohickey]

My ex bought a condo, the promply quit the job that enabled her to pay her mortgage and took one that paid half as much because it made her feel good. She had been using her HELOC to pay her mortgage until her bank closed the credit line. I guess now she gets a bailout.

[This_far]

I wonder if there is any language concerning delinquency due to tax increases when the P&I has been under control?

For me, the mortgage wasn’t the problem, it was the yearly increases in escrow for taxes. Within 2.5 years, the tax escrow was within $60 of P&I (almost doubled the monthly payment).

(Massachusetts)