by Annie Carvalho, Vice President, Strategy and Development
In early June, a few of us from NCST joined representatives from the Federal Housing Finance Agency (FHFA), Fannie Mae, and Freddie Mac on a jam-packed two day visit to the Tampa Bay and South Florida metro areas. We engaged with more than 15 community buyer organizations in roundtable sessions and on property tours across Pinellas, Hillsborough, Palm Beach, and Broward Counties.
Many advocates caution that RealtyTrac data underestimates the number of zombie foreclosures, which are hard to count.
WASHINGTON — Buyers of nonperforming Federal Housing Administration loans will have to evaluate borrowers for principal reductions and abide by new restrictions issued by the Department of Housing and Development on Thursday. "Certain families with distressed mortgages insured by FHA may soon be eligible for a reduction of their outstanding loan amounts should their mortgages be sold through the Distressed Asset Stabilization Program," HUD said in a press release.
Yet the results, released Thursday, also show that a significant percentage of loans sold to investors had better outcomes than nonperforming loans in the portfolios of Fannie and Freddie, according to Laurie Goodman, co-director of the Housing Finance Policy Center at the Urban Institute.
Eight months after the loans were sold, 21% of the borrowers avoided foreclosure while 16% were foreclosed upon, according to the FHFA report. That compares to 14% of borrowers of loans held in GSE portfolios who avoided foreclosure and 20% who were foreclosed upon.
In some states, legislative fixes repurposed to go after owner-occupied housing. Many advocates caution that RealtyTrac data underestimates the number of zombie foreclosures, which are hard to count.
Today, the Federal Housing Administration (FHA) announced a suite of changes to its Distressed Asset Sales Program (DASP) that will significantly improve the program's effect on homeowners, neighborhoods, and the housing market. These changes include requiring buyers of delinquent mortgages to offer principal reduction and sustainable modifications to qualified homeowners, prohibiting buyers from walking away from vacant properties, instituting a series of changes aimed at increasing the number of note sales to nonprofits and municipalities, and increasing the transparency of the program.
As part of our policy work, NCST has been monitoring "fast-track foreclosure" laws, which aim to prevent neighborhood blight by enabling abandoned homes to pass through the foreclosure process more quickly. Last month, Ohio passed a fast-track bill that many are considering a template for future legislation in other states. In considering whether this bill is truly a national model, NCST has contemplated whether the law appropriately speeds the process without harming homeowners or neighborhoods. In the case of the Ohio statute, we believe the verdict is decidedly mixed.
The Federal Housing Finance Agency (FHFA) today announced that Fannie Mae and Freddie Mac will offer principal reduction to certain seriously delinquent, underwater borrowers who are still struggling in the aftermath of the financial crisis to help them avoid foreclosure and stay in their homes. The new Principal Reduction Modification program is a one-time offering for borrowers whose loans are owned or guaranteed by Fannie Mae or Freddie Mac and who meet specific eligibility criteria. The modification will be available to owner-occupant borrowers who are 90 days or more delinquent as of March 1, 2016, whose mortgages have an outstanding unpaid principal balance of $250,000 or less, and whose mark-to-market loan-to-value (MTMLTV) ratios exceed 115 percent. Other eligibility criteria apply (see FHFA Fact Sheet for eligibility criteria and key dates).
By Andrea Riquier | Apr 11, 2016 | MarketWatch
It's 9:30 a.m. on a recent sunny Friday, and 60 people have crammed into an airport hotel conference room in Northern Virginia to hear Kevin Shortle, a veteran real estate professional with a million-watt smile, talk about “architecting a deal.” Some have worked in real estate before, flipping houses or managing rentals. But the deals Shortle, lead national instructor for a company called Note School, is describing are different: He teaches people how to buy home notes, the building blocks of housing finance. While titles and deeds establish property ownership, notes — the financial agreements between lenders and home buyers — set the terms by which a borrower will pay for the home. Financial institutions have long passed them back and forth as they rebalance their portfolios.
Recently, NCST – joined by the Center for Community Progress, CFED, and the Housing Partnership Network – submitted a letter responding to the request for comment on the proposed Duty to Serve rule. Under the legislation that created the Federal Housing Finance Agency (FHFA) in 2008, Fannie Mae and Freddie Mac are charged with a “duty to serve" three underserved markets: manufactured housing, affordable housing preservation, and rural housing. While FHFA first proposed a rule implementing this law in 2010, that rule was never finalized, and the agency re-proposed the rule this past December.
Our letter focused very specifically on the proposal's request for ideas on how the rule could support state and local programs focused on neighborhood stabilization. We asked that the Duty to Serve rule support state and local neighborhood stabilization efforts in three key ways:
Winnebago County Housing Authority (WCHA), now in its 75th year of operation, continues to provide housing, self-sufficiency, and enrichment programs to low- and moderate-income families – approximately 20 percent of residents in WCHA housing are veterans. This home on South Fourth Street in Rockford, Illinois, donated by Wells Fargo, had been vacant for several years and was beginning to become an eyesore.