The Federal Deposit Insurance Corporation (FDIC) will consider soon new rules that define what a safe or “qualified” residential mortgage is as part of the Dodd-Frank financial overhaul law. Experts expect the classification will likely have broad sweeping effects on the mortgage market. The Dodd-Frank financial overhaul law, which was passed last summer, contains a risk-retention requirement that requires issuers of securities backed by mortgages and other assets to maintain 5 percent of the risk of a loan, if it is packaged into a security and sold to investors, Dow Jones reports. The idea is that lenders would be more careful with making loans since they would face steeper losses if a loan went bad. Six federal agencies are working to resolve numerous issues on the proposal but one of the most controversial issues yet to be resolved is which loans are exempt from the risk-retention requirement and would be considered safe or “qualified” mortgages. Regulators have suggested issuing two different plans for public comment because they expect heated debate. One plan would call for a minimum 20 percent down payment, and another plan would recommend a 10 percent down payment as well as mortgage insurance. FDIC banking regulators have called for a minimum 20 percent down payment requirement for new mortgages. Loans guaranteed by Fannie Mae and Freddie Mac, which make up about 20 percent of the mortgage market, are expected to be exempt as long as they remain under government control. Government agencies such as the Federal Housing Administration are already exempt.
Freddie Mac has launched a series of videos aimed at helping consumers separate foreclosure fact from fiction. Each 90- to 120- second video, which can be viewed on Freddie Mac’s YouTube Channel, dispels one of five common myths that may prevent homeowners from keeping their homes if they face foreclosure. The video series is based on content from Freddie Mac’s “Get the Facts on Homeownership” education and outreach materials.
The five myths the video series focuses on are:
· Myth 1: If my house is foreclosed, I can never buy a house again – the foreclosure will stay on my record forever.
· Myth 2: I should stop paying my mortgage so I can get assistance with my mortgage payments.
· Myth 3: If I’m late on my monthly payments, I’ll lose my house.
· Myth 4: I am getting many offers for help from a variety of people. They are probably all scams.
· Myth 5: My lender is not responding to my inquiries, so I should just give up and face foreclosure.
Generation X – young families and adults ages 31 to 45 – are likely to lead the home buying recovery as it gets underway, according to real estate experts who spoke at an education webinar produced by the National Association of Home Builders (NAHB) in partnership with Builder magazine.
Builders nationwide pulled 382,000 single-family building permits in February, a 9.3 percent decrease compared with January, according to the U.S. Census Bureau.
If it is too good to be true, it probably is. More would-be renters are reporting that scammers are listing rental properties on Craigslist at extremely attractive prices, and then using rental applications submitted by interested parties to steal the applicants’ identities.
A survey of 1,000 consumers conducted by Opinion Research asked consumers 22 questions about credit scores. Consumers, on the average, got 60 percent of the questions right, revealing several gaps in credit score knowledge. Credit scores have been dropping nationwide due to economic hardship. About a quarter of customers – nearly 43.4 million – had a credit score of 599 or below.
Buying a home can be time consuming. One way to save time is by organizing all the necessary documents most lenders require, such as those that prove employment and income. Typically, lenders want two recent pay stubs, two years of tax returns, bank statements, and proof of assets, such as 401(k) and trusts, and debts, such as credit card statements. Documents are especially important for borrowers who are self-employed. Even if a home purchase is months or years away, having good credit history is essential. A few points on a FICO score can mean the difference between a higher or lower interest rate offered on a mortgage loan. Borrowers also are advised to monitor home-lending rates.
The National Association of REALTORS® said in testimony before the House Financial Services Subcommittee on Insurance, Housing and Community Opportunity, that Congress needs to strengthen and reauthorize the National Flood Insurance Program for the long term to prevent undermining the fragile real estate market recovery. The NFIP authority is set to expire on September 30, 2011 for the 10th time in two years. The program ensures access to affordable flood insurance for more than 5.6 million home and business owners in 21,000 communities nationwide. NAR survey data shows that the month-to-month approach has exacerbated uncertainty in many recovering real estate markets that depend on the NFIP to protect them against flood losses. The lapse in June 2010 also resulted in the delay or cancellation of 47,000 home sales.
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