Consumers paying Credit Cards before the Mortgage?

Citing its data from recent years, TransUnion observed that before 2008, consumers for decades tended to pay their mortgage first “because it was their greatest asset,” says Steve Chaouki, group vice president for TransUnion’s financial services unit.

But the crash in home values that began in 2008, coupled with rising unemployment, caused consumers for the first time to begin putting a higher priority on making credit card payments over mortgages and auto loans.

“Consumers see that as their home values declined, credit cards represented liquidity, which is a more valuable commodity during an economic crisis,” Chaouki says.

The economy may be improving, but the underlying factors that put credit cards at the top of the bill-payment hierarchy persist, he says.

“We may see the payment hierarchy revert to the more-traditional setup where people pay their mortgages first when there is some real home equity to protect, or when credit becomes so freely available that it won’t be seen as a rare commodity to preserve,” Chaouki says.

It “will probably be a long time” before consumer credit lines, which many lenders cut during the crisis, become so abundant that consumers feel they can put credit card bills lower on the priority list, he says

NATIONAL RATE SURVEY RESULTS
Dec 9th, 2011 (Bankrate.com)

30-year Conventional:         
4.24% — with avg. points: 0.36 pts

 15-year Conventional:         
3.48% — with avg. points: 0.36 pts                                                                                          

 30-year FHA:          
3.97% — with avg. points: 0.36 pts
5-year Conventional ARM:           
3.18% — with avg. points: 0.36 pts

 

Fannie Mae Announces Eviction Moratorium for the Holidays

WASHINGTON, DC – Fannie Mae (FNMA/OTC) announced today that it will suspend evictions of foreclosed single family and 2-4 unit properties from December 19th, 2011 through January 2nd, 2012.  During this period, legal and administrative proceedings for evictions may continue, but families living in foreclosed properties will be permitted to remain in the home.

“The holidays are meant for families to spend time together, especially if they’ve gone through the stress of financial challenges and foreclosure,” said Terry Edwards, Executive Vice President of Credit Portfolio Management, Fannie Mae. “No family should have to give up their home during this holiday season.  Fannie Mae is committed to helping borrowers avoid foreclosure whenever possible and we encourage any homeowner who is having difficulty making their payment to reach out for help.”

Homeowners with Fannie Mae-backed loans can call 1-800-7FANNIE or visit www.knowyouroptions.com for information and resources on foreclosure prevention options, including contact information for the Fannie Mae Mortgage Help Center or a HUD-approved counseling agency in their area. 

Fannie Mae exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America’s secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to home buyers. Our job is to help those who house America.

Recent Update on FHA & VA loan changes .

Two Important Legislative Changes

FHA Loan Limits

Last Friday, the President signed a bill that enables HUD to restore the previous FHA loan county limits. This would mean that the FHA loan limits would be the greater of the current limit or the limits made available under the Economic Stimulus Act of 2008. While this is welcomed news, HUD must provide guidance on how they will be implementing this change in order for Coldwell Banker Home Loans to determine what action can be taken and when.

As soon as HUD provides guidance on their approach, the announcement will be reviewed and an FYI will be issued to provide detailed instruction with Coldwell Banker Home Loans policy and release timeline.

VA Funding Fee

On November 21, 2011, the President signed a bill to revert the funding fees back to the previous/higher level through September 30, 2016. The VA is expected to release a circular with additional detail very soon. The VA Funding Fee Payment System (FFPS) site is instructing lenders not submit payments for loans closed on or after November 22, 2011 until their system has been updated to return the previous higher fees again. FYI 11-270 will be reissued this week, notifying external partners and correspondents.

Click HERE to link to the FHA Loan Limits per State & County. Please save this Link to you favorites and you will have this tool at your fingertips.

VA FUNDING FEE UPDATES

USAA VA FUNDING FEE UPDATES

Movers Advantage USAA Preferred Agent!

The Pending Congressional Action. H.R. 674 has passed the Senate, and is under consideration in the House of Representatives. This legislation would keep funding fees at their present levels through Fiscal Year 2016. VA expects the House of Representatives will pass this bill, and that it will be sent to the President for signature during the week of November 18, 2011.

The Procedures for Remitting Higher Funding Fees than Required. If H.R. 674 is not signed by November 18, 2011, funding fees will decrease as scheduled for a short period of time. If Funding fees do reset to the lower amounts, VA’s Funding Fee Payment System will collect only the statutory lower amount. Lenders who disclosed higher funding fees on closing documents Based on anticipation of Congressional action, will have to refund the difference to the Veteran Borrower, either in the form of a principal curtailment for financed funding fees, or a check for Funding fees paid at closing.

Below is the Whole Memo from VA for you to review.

Veterans Benefits Administration Circular 26-11-18
Department of Veterans Affairs November 15, 2011
Washington, DC 20420

 FUNDING FEE UPDATES

 1. Purpose. The purpose of this circular is to provide lenders with information on pendingCongressional action affecting Department of Veterans Affairs (VA) funding fees. VA Circular 26-11-17 and other announcements noted the likelihood of funding fees remaining at their Present levels.

 2. Pending Congressional Action. H.R. 674 has passed the Senate, and is under consideration in the House of Representatives. This legislation would keep funding fees at their present levels through Fiscal Year 2016. VA expects the House of Representatives will pass this bill, and that it will be sent to the President for signature during the week of November 15, 2011.

 3. Procedures for Remitting Higher Funding Fees than Required. If H.R. 674 is not signed by November 18, 2011, funding fees will decrease as scheduled for a short period of time. If Funding fees do reset to the lower amounts, VA’s Funding Fee Payment System will collect only The statutory lower amount. Lenders who disclosed higher funding fees on closing documents Based on anticipation of Congressional action, will have to refund the difference to the Veteran Borrower, either in the form of a principal curtailment for financed funding fees, or a check for Funding fees paid at closing.

 4. Procedures once H.R. 674 becomes Law. Once the bill becomes law, funding fees will Revert to their current levels. VA expects all lenders to remit the correct funding fees on these Loans, regardless of closing document disclosures. VA will not waive the difference in fees Between the lower November 18, 2011, fees and the higher H.R. 674 fees in these situations.

 5. Further Updates. As soon as we receive definitive information on the status of thisLegislation, we will post a notice on our website, http://www.benefits.va.gov/homeloans/, and Issue a circular. We appreciate your patience and efforts to help Veterans use their home loan Benefit during this process.

 6. Rescission: This circular is rescinded November 1, 2012.

By Direction of the Under Secretary for Benefits
Michael J. Frueh
Acting Director, Loan Guaranty Service
Distribution: CO: RPC 2021
SS (26A1) FLD: VBAFS, 1 each (Reproduce and distribute based on RPC 2021)

(LOCAL REPRODUCTION AUTHORIZED)

Home Affordable Refinance Program (H.A.R.P. UPDATE)

On Monday, October 24, 2011 the federal government announced that it would revise the Home Affordable Refinance Program (HARP).  The consensus being that it would “allow many more struggling borrowers to refinance their mortgages at today’s ultra-low rates, reducing monthly payments for some homeowners and potentially providing a modest boost to the economy.” 

Q.  What is H.A.R.P.?

Q.  Why are they making these changes to H.A.R.P.?

Q. What are the new program enhancements?

Q.  Which borrowers may be eligible for an enhanced H.A.R.P.?

Q.  When will these enhancements become available?

For more information on H.A.R.P. please contact us and we will be glad to answer any of your questions.



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