Newly Proposed Government Loan Program to Bring Relief to All Homeowners

/PRNewswire / -- A newly proposed home loan program known as 4/40 for Freedom was introduced today to address the continuing housing crisis, as evidenced by the recent AP story "Mortgage Delinquencies Hit Record High (May 28, 2009)." The program calls on Congress to draft a bill to reduce interest rates on all home mortgages to 4 percent and give new home buyers a 4 percent, 40-year loan option, which would dramatically stimulate the economy, prevent any more "toxic debt" and put America back to work.

On average, housing represents 35 percent of total family expenditures. The proposed program offers hope to struggling homeowners because it immediately decreases the monthly mortgage burden. Expected savings with the program are approximately 33-38 percent per month per household.

"Americans are begging for relief," said Ken Parker, founder of 4/40 for Freedom. "The program benefits are immediate; lower mortgages means increased disposable income, which translates to available cash to stimulate the economy through investments and product and service purchases. We have received enthusiastic support from the financial and business community regarding the program," Parker continued.

The program is simple: for existing homeowners it would be available automatically -- no qualification process or credit report required. The existing loan would be modified to a 4% interest rate, 40 year term, with no credit check. For foreclosed owners and first time buyers, the program offers a no nonsense qualification and application process, similar to FHA. Jumbo loans would also be offered, up to 3.5 million. Once passed by Congress, the program would be available for one year. As the economy improves and home values go up, homeowners will refinance with conventional programs and the U.S. backed real estate interest loan debt will be repaid, resulting in additional economic capital.

The Seidman Research Institute, a part of the W.P. Carey School of Business at Arizona State University, has produced a cost report regarding the 4/40 for Freedom program and it is available for purchase, along with bumper stickers and additional support material at www.4-40forFreedom.com.

Parker states that it is in the opinion of many business leaders that the money that is saved on interest will have an economic multiplier effect of three to five times the amount reinvested back into the economy. "If each homeowner saves an estimated $250 a month on their mortgage, all of a sudden they can make additional purchases and the effect on the economy will be tremendous," Parker said.

Nationwide, homeowners are being asked to sign an online petition to show their support of the program through the 4/40 for Freedom Web site, www.4-40forFreedom.com, which will then be taken to Congress.

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Freddie Mac Announces Two Initiatives Supporting President Obama's Making Home Affordable Plan

/PRNewswire-FirstCall/ -- Freddie Mac (NYSE:FRE) today announced two new mortgage initiatives under President Obama's Making Home Affordable plan designed to help families with Freddie Mac-owned mortgages who are delinquent, at-risk of default, or struggling to refinance because of declining property values.

The new initiatives include.......
http://georgiahousing.blogspot.com/2009/03/freddie-mac-announces-two-initiatives.html

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Expert: Treasury Announcement Signals Help for Housing Crisis

Affordable housing expert Frank Alexander of Emory Law School says the good news for mortgage holders is that this week's announcement by U.S. Treasury Secretary Tim Geithner is "the first time that we've actually had the administration make a financial commitment to dealing with mortgage foreclosure issues."

"What Geithner announced is considerably further along towards a recovery plan for housing than what we witnessed last in October, when the bailout was first done," says Alexander. "I think the broad elements make sense, each in a different context."

While all the details aren't in place, Alexander notes that Geithner's announcement initially hit the right notes: to maximize the availability of long-term, new residential mortgages, which would encourage people to refinance, and to continue the push for reform of the nation's bankruptcy laws "to permit courts to reduce a mortgage to the value of the house."

Alexander is less hopeful about the Treasury Secretary's push for loan modifications. "I'm not optimistic that any of those initiatives are really going to work because of the nature of secondary mortgage market," he says.

Overall, says Alexander, "we now await the details of the comprehensive housing program being developed by the administration,” which should be announced in the coming weeks. Parts of the programs likely can be implemented directly by Secretary Geithner under his existing powers; some can and will be done by U.S. Housing and Urban Development Secretary Shaun Donovan. For other parts of the program they will likely need new legislation."

Alexander is director of the Project on Affordable Housing and Community Development, which provides technical assistance to local governments and nonprofit community development organizations.

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House Bill Aims to Stabilize Housing, Addresses Foreclosure and Stimulus

A bill that embraces the need for righting the housing market --- the first big step toward economic recovery --- was introduced Friday in the U.S. House of Representatives.

H.R. 384, The TARP Reform and Accountability Act, was offered by Rep. Barney Frank (D-Mass.), chair of the House Financial Services Committee. The bill would require the Treasury Department to develop a program, outside the Troubled Asset Relief Program, to stimulate demand for home purchases and lower property inventories, by making affordable mortgages available for qualified buyers through interest rate buydowns, a priority of the National Association of Realtors.

The measure would amend the TARP provisions of the Emergency Economic Stabilization Act of 2008 to make significant steps to reduce foreclosures, strengthen accountability and close loopholes. Treasury could consider the impact of areas with the highest inventories of foreclosed properties.

NAR President Charles McMillan was heartened by the legislation that would move the housing market forward. "The bill proposed by Chairman Frank is an important first step toward launching a real estate recovery. Housing has always led this country out of economic downturns, and this bill recognizes that the key to bolstering the overall economy is creating stability in the real estate markets. With foreclosure relief, improving the Hope for Homeowners Plan, and expanding TARP to support commercial real estate loans and commercial mortgage-backed securities, this legislation will help create housing stability."

"By directing the Treasury Department to increase the availability of affordable mortgages rates for qualified home buyers and to offer reduced rate loans designed to stimulate demand for home purchases and clear inventory of properties, Chairman Frank has responded to the most critical issues facing potential homeowners," McMillan said.

Foreclosure relief, using the second half of the $700 billion previously authorized by Congress, would be conditioned on stipulation that $50 billion be used for foreclosure mitigation and calls for a plan to be put into action by March 15. That would allow the Treasury to begin committing the remaining TARP funds for the plan no later than April 1.

The plan would require that foreclosure assistance must apply only to owner-occupied residences. Further, the bill would provide liability protection for loan servicers who engage in loan modifications. Such servicers would have to report regularly to the Treasury.

In addition, the Treasury would be authorized to provide support for commercial real estate loans and commercial mortgage-backed securities, an NAR priority.

NAR has been urging the incoming Obama administration, as well as Congress, to address critical housing needs. "This legislation is a great beginning, but more needs to be done. We must continue to bring potential homebuyers into the market by ensuring low mortgage interest rates, making the higher 2008 conforming loan limits permanent, and applying the $7,500 tax credit to all homebuyers and making it non-repayable," McMillan said.

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Freddie Mac Extends Suspension of Single Family Foreclosure Sales, Evictions Until January 31, 2009

/PRNewswire-FirstCall/ -- Freddie Mac (NYSE:FRE) today announced it is extending its suspension of all foreclosure sales and evictions involving occupied single family and 2-4 unit properties with Freddie Mac-owned mortgages through January 31, 2009. The suspension does not apply to vacant single family properties.

"Freddie Mac is committed to pursuing every responsible opportunity to reduce foreclosures and accelerate the return of stability to the U.S. housing market," said Freddie Mac Chief Executive Officer David M. Moffett. "Today's announcement will provide Freddie Mac and its servicers additional opportunities to help put more families on the path to stable homeownership."

The extension will also provide servicers with more time to help troubled borrowers find an alternative to foreclosure and implement the Streamlined Modification Program that went into operation on December 15, 2008. Developed by Freddie Mac, Fannie Mae, the Federal Housing Finance Agency (FHFA), HOPE Now and 27 mortgage servicers, the Streamlined Modification Program was designed to expedite loan modifications for eligible borrowers who have missed three or more mortgage payments.

Freddie Mac gives lenders servicing its mortgages broad authority to help troubled borrowers before they miss a payment through forbearance as well as provide permanent rate reductions, mortgage term extensions or other modifications to borrowers who are already delinquent. In 2008 Freddie Mac enabled three out of five of its delinquent borrowers avoid foreclosure. (For more about Freddie Mac workout options, see freddiemac.com)

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Mortgage Rates Fall Below 5% in Georgia

For the first time in recent history, the 30 year fixed rate in Georgia declined to 4.87%.

According to Zillow Mortgage Marketplace, 30 year fixed loans fell 4% in Georgia for the week ending December 14, 2008.

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Mortgage Rates Take Off After Volatile Week in Stock Market; Rates in Some States Increase by 10%

Average Georgia 30 year fixed rates increased 7.8% to 6.29%.

PRNewswire/ -- Mortgage rates surged last week, with rates for 30-year fixed mortgages increasing to 6.36 percent, up from 5.95 percent the week prior, according to the Zillow Mortgage Rate Monitor, compiled by leading real estate Web site Zillow.com(R). Mortgage rates for 15-year fixed rose to 6 percent, up from 5.65 percent and 5-1 adjustable rate mortgages increased to 5.69 percent from 5.68 percent.

Mortgage Type Average Rate Average Rate % Change
Week ending 10/19/08 Week ending 10/12/08
30-year fixed 6.36% 5.95% 6.9%
15-year fixed 6.00% 5.65% 6.1%
5-1 ARM 5.69% 5.68% 0.1%

Rates for 30-year fixed mortgages appeared to be dipping again on Monday evening, however, with the average rate on Zillow Mortgage Marketplace at 5.97 percent.

At a state level, the 30-year fixed mortgage rate in North Carolina saw the most significant increase from 5.79 percent to 6.38 percent. Rates on 30-year fixed mortgages were lowest in the states of Colorado (6.24%) and Oregon (6.25%), while Connecticut (6.49%) and Maryland (6.45%) had the highest rates.

The Zillow Mortgage Rate Monitor is compiled each week using thousands of mortgage rates quoted on Zillow Mortgage Marketplace (www.zillow.com/mortgage) by mortgage lenders to borrowers who have submitted loan requests. State-level data is gathered for the top 20 states with the highest quote volume on Zillow.

Zillow Mortgage Marketplace is an open and transparent lending marketplace, providing borrowers an anonymous and hassle-free way to receive an unlimited number of customized mortgage quotes directly from confirmed lenders.

For more detailed rate charts and data, as well as choices of mortgage calculator, please visit www.zillow.com/mortgage.

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Bankrate: Mortgage Rates Remain Volatile

PRNewswire-FirstCall/ -- Mortgage rates fell this week, with the average 30-year fixed mortgage rate dropping to 6.2 percent. According to Bankrate.com's weekly national survey, the average 30-year fixed mortgage has an average of 0.4 discount and origination points.

The average 15-year fixed rate mortgage popular for refinancing retreated to 5.95 percent, while the average jumbo 30-year fixed rate was down slightly to 7.61 percent. Adjustable mortgage rates were sharply lower, with the average 1-year ARM down to 5.89 percent and the average 5/1 ARM pulling back to 6.21 percent.

Mortgage rates continue to be volatile, yo-yoing up and down from one day to the next. Heightened economic worries pushed mortgage rates lower versus last week, but the continued twists and turns of the credit crunch are certain to produce more volatility in mortgage rates. Although mortgage rates are pegged to long-term Treasury yields, the spread above risk-free Treasury yields is ever-changing as credit worries prevail. The movement of fixed mortgage rates is not directly influenced by the Federal Reserve's cut to short-term interest rates.

This year has been a wild ride for mortgage rates, with a low in January of 5.57 percent and a high of 6.77 percent in July. At today's rate of 6.20 percent, a $200,000 loan carries a monthly payment of $1,224.94.

SURVEY RESULTS

30-year fixed: 6.20% -- down from 6.41% last week (avg. points: 0.4)
15-year fixed: 5.95% -- down from 6.14% last week (avg. points: 0.44)
5/1 ARM: 6.21% -- down from 6.49% last week (avg. points: 0.36)



Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

For a full analysis of this week's move in mortgage rates, go to http://www.bankrate.com/mortgagerates

The survey is complemented by Bankrate's weekly forward-looking Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next 30 to 45 days. More than half of respondents, 53 percent, expect rates to retreat further in the coming weeks. However, 41 percent predict a rebound in mortgage rates, while just 6 percent forecast that mortgage rates will remain more or less unchanged in the next 30 to 45 days.

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Two-Thirds of Struggling Homeowners Meet Key Criteria for Housing Bill Relief, According to Survey by CCCS of Greater Atlanta

PRNewswire/ -- Almost two-thirds of homeowners who called Consumer Credit Counseling Service (CCCS) of Greater Atlanta for foreclosure prevention counseling in recent months appear to meet the threshold requirements for relief under the new federal housing bill that took effect Oct. 1, according to a recent survey of those homeowners.

Of 591 people surveyed in late September, 381 of them, or 64.6 percent, said they met five key eligibility criteria for the mortgage refinancing program.

On July 30, President Bush signed the Housing and Economic Recovery Act of 2008. The law created a new program called Hope for Homeowners intended to help families save their homes from foreclosure. Mortgage lenders participating in the program can allow "at risk" borrowers to refinance their current mortgage into a new fixed-rate loan insured by the FHA. Lenders' participation in the program is voluntary.

"Our survey results indicate this new FHA program holds the potential to help a large number of Americans struggling to pay their mortgage," said Suzanne Boas, president of CCCS of Greater Atlanta. "Not everyone will be able to meet the terms. But if someone meets the basic criteria laid out in the housing bill, it would be worth a phone call to their lender to ask about the FHA program."

Homeowners must meet several requirements to be considered for the program. People who called CCCS of Greater Atlanta in July and August trying to avoid foreclosure were surveyed about these requirements by email from Sept. 19-23.

To be counted among the 64.6 percent of survey takers who appear to meet the threshold criteria, people needed to indicate that they live in the home with the problem mortgage; their mortgage was originated before January 2008; they didn't have an existing home equity line or other second mortgage; they did not own another home and they spend at least 31 percent of their gross monthly income on mortgage debt.

From those surveyed, the top challenge to participation in the FHA program is paying off a home equity loan or second mortgage. Thirty-five percent of respondents reported that their home secures more than one loan.

A second mortgage or home equity loan must be paid before a homeowner can qualify for the refinance program. It is possible to pay off the second mortgage through proceeds from the new FHA loan. That could be difficult if the first and second mortgage are held by different lenders because only the primary loan qualifies for the FHA program.

Also, nearly 20 percent of respondents say they don't spend at least 31 percent of their gross monthly income on their mortgage -- a threshold required by the FHA refinance program.

Borrowers who qualify for the FHA program are responsible for paying loan origination fees, as well as an insurance premium to FHA equal to 1.5 percent of the principal annually.

There are several other conditions:

-- The borrower must certify there was no misrepresentation in their application for the existing loan.

-- The borrower must agree to share both initial equity and future appreciation with The U.S. Housing and Urban Development Department (HUD).

-- The equity sharing agreement provides that if the house is sold within the first year, 100 percent of the initial equity (generally 10 percent of the value of the property at origination) will go to FHA. After 1 year, FHA is entitled to 90 percent of the initial equity. The percentage keeps dropping in 10 percent increments to 50 percent after the fifth year, where it stays.

-- In addition to the initial equity which is a fixed amount, 50 percent of any future appreciation of the property must be paid to HUD when the property is sold.

-- The FHA loan will be a 30-year fixed rate mortgage and may not exceed 90 percent of the current appraised value of the property. An additional 3 percent mortgage insurance premium will be financed in the mortgage making the initial loan to value 87 percent.

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News to Use in Fayetteville, Atlanta, Columbus, Peachtree City and all of Georgia

Countrywide Warns Millions of Data Breach in ConsumersAffairs.com Article

GFP Note: More potential troubles may lie ahead for some Georgia homeowners. This time it's not from the mortgage, but rather from potential identity theft.

Countrywide Warns Millions of Data Breach

Former Employee Sold Customer Records for Two Years

by Martin H. Bosworth
ConsumerAffairs.com
September 11, 2008

Customers of troubled mortgage lender Countrywide already have enough to worry about due to the collapse of the housing market and the lender's sale to Bank of America. Now they can add a new worry to the list--identity theft and fraud. As many as 2 million Countrywide customers may be at risk thanks.....

Read the story.

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President Bush Signs Landmark Housing Bill into Law

RISMEDIA - Landmark housing legislation signed into law yesterday by President Bush is aimed at ending the current cyclical downturn in the housing industry, helping home buyers and strapped borrowers and strengthening the housing finance system, according to the National Association of Home Builders (NAHB).

“This milestone bill contains several provisions to get home buyers back into the marketplace, stop the slide in home prices, provide a lifeline to borrowers facing foreclosure, improve mortgage liquidity and bolster confidence in Fannie Mae and Freddie Mac,” said NAHB President Sandy Dunn, a home builder from Point Pleasant, W.Va. “We commend Congress and the President for taking this action to provide much-needed relief to the American people.”

For the past year, NAHB has been in the forefront in pushing for legislation to address the turmoil in the financial and housing markets and to bolster the nation’s faltering economy.

“By helping Americans avoid foreclosure, cracking down on predatory lending, protecting communities from the blight of abandoned homes, and providing generous tax incentives to encourage home ownership, this legislation will help strengthen the housing market and create jobs,” said Speaker Nancy Pelosi.

Senate Banking Committee Chairman Chris Dodd (D-Conn.), a chief architect of the bill, calls it “the most important piece of housing legislation in a generation.”

Prudential California/Nevada/Texas President Ed Krafchow agreed, saying the passing of the bill signifies an important turning point in the real estate industry.

“I think [the passing of the bill] is indicative of us coming through the storm,” Krafchow said. “The best part of this is, that this is a rebuilding process and now we’re on the other side of the perfect storm that hit the industry and certainly damaged the financial part of the business and greatly impeded doing real estate transactions. I’m not suggesting we’ve hit smooth sailing, but the majority of the storm is over and we’re starting to move forward in the business and the industry as it grows. That’s the most positive piece of the signing of this bill.”

Key elements of H.R. 3221, the Housing and Economic Recovery Act of 2008, include:

- A temporary first-time home buyer tax credit. The tax credit will stimulate home buying, reduce excess supply in housing markets and shore up home prices.

- FHA modernization and expansion. A revitalized FHA will have greater flexibility to respond to the needs of borrowers, enable more working families to become home owners and play an important role in the mortgage markets. To address the foreclosure crisis, the FHA is given additional authority to insure up to $300 billion of mortgages to refinance loans headed for foreclosure.

- GSE (government-sponsored enterprise) reform. The law reforms the regulation of Fannie Mae and Freddie Mac and permanently increases the conforming loan limit to help buyers in high-cost markets. To reassure financial and global markets, the government will temporarily expand its line of credit to Fannie and Freddie and permit the U.S. Treasury to purchase an equity stake in the companies through the end of 2009.

- Mortgage Revenue Bond Program. The measure gives states the ability to issue an additional $11 billion in mortgage revenue bonds, which will help strapped borrowers seeking to refinance their home loans.

- Low Income Housing Tax Credit. Enhancing this program will expand the supply of much-needed affordable rental housing.

Tax Credit Centerpiece of Housing Bill

The centerpiece of the housing bill is a temporary, $7,500 first-time home buyer tax credit for the purchase of any home. The tax credit can be used for homes purchased between April 9, 2008 and July 1, 2009. It is expected to provide a significant-and temporary-financial incentive for home buyers.

“The tax credit is the best stimulative measure,” said Dunn. “It will increase housing demand, get home buyers back into the marketplace and fight falling home prices, which threaten the economy as a whole.”

The original eligibility period expired in April 2009, but following a major grassroots campaign from NAHB members, the period was extended to June 30, 2009 to enable home builders to include the credit in their sales and marketing next spring and into the early summer-the peak home buying season.

NAHB has launched a new website, www.federalhousingtaxcredit.com, which includes a set of comprehensive questions and answers about how the credit works and how consumers can put it to their advantage.

Major Mortgage Fraud Scam Busted

DOSSEY RICHARDS, 36, of Atlanta, Georgia; LOVIE HOBBS, a/k/a “Lovie Hobbs Hagwood,” 47, of Lithonia, Georgia; MONTRA McKENZIE, 29, of Atlanta, Georgia; CYRUS DAVIS, 42, of Atlanta, Georgia; MARCUS VICKERS, 35, of Ellenwood, Georgia; RAYSHUAN HARMON, 27, of East Point, Georgia; and MICHELLE DAVILA, 35, of Atlanta, Georgia, have been arrested on a federal criminal complaint related to a mortgage fraud scheme.

United States Attorney David E. Nahmias said, “This is unfortunately another in a long series of major mortgage fraud cases in metro Atlanta. In this case, an entire condominium complex was gutted by fraud and greed. And as we have seen too many times before, one of the defendants charged is a closing attorney, someone the victim lenders retained and trusted to protect them against such fraud, but who instead became a participant in it. Mortgage fraud will remain a high priority for federal law enforcement in North Georgia.”

FBI Atlanta Special Agent in Charge Greg Jones said, “Today's (June 18, 2008) arrests illustrate clearly that the crime of mortgage fraud involves people from all walks of life who unwisely choose to collectively use their various positions and skills to rip off banks or other lending institutions. Mortgage fraud is a complex and prevalent crime problem that the FBI is well suited to address and intends to do just that.”

According to Nahmias and the information presented in court: The complaint alleges one count of conspiracy to commit wire fraud based on a mortgage fraud scheme.

Participants in the alleged fraud included DOSSEY RICHARDS, the owner of “Red Hair Investment Group, LLC;” MARCUS VICKERS, d/b/a “Title Depot of America,” a closing attorney in the Atlanta area; MONTRA McKENZIE and CYRUS DAVIS, both mortgage
brokers in the Atlanta area; MICHELLE DAVILA, an employee of Wachovia Bank; and
RASHUAN HARMON, who provided fraudulent appraisals as a part of the scheme. In
addition, LOVIE HOBBS, accused of being a “straw buyer,” is an employee with the Internal
Revenue Service (IRS)in Atlanta.

The properties that are the subject of the charges are units in the “Blue Sky” condominium complex located at 3106 Memorial Drive in Atlanta. It is alleged that the persons named in the criminal complaint conspired to defraud certain lenders by inflating the value of units at Blue Sky.

The fraudulent transactions outlined in the complaint occurred between March and May of 2008. The complaint alleges that the current (as of today) listings of 25 units in the complex range in price of between $2,000 and $28,750; however, the inflated sales prices used to fraudulently obtain inflated loans were between $135, 000 and $155,000. The participants charged include the property owner/seller DOSSEY RICHARDS as well as the straw buyer/borrower LOVIE HOBBS. As in most mortgage fraud cases, prior inflated loans obtained for units in Blue Sky have gone into foreclosure, causing losses to the victim lenders.

The defendants each face a possible maximum term of 30 years in federal prison. In determining the actual sentence, the Court will consider the United States Sentencing
Guidelines, which are not binding but provide appropriate sentencing ranges for most
offenders.

Members of the public are reminded that the indictment contains only allegations. A
defendant is presumed innocent of the charges and it will be the government's burden to
prove a defendant's guilt beyond a reasonable doubt at trial.

This case is being investigated by Special Agents of the FBI. Assistant United States Attorney Barbara Nelan is prosecuting the case.