Gulf Coast Associates' Blog: Mortgage Information

As you who visit the REW blogs on a regular basis already know, we try our best to keep you abreast of important changes in the lending industry when we can. To that end, I wanted to make a quick post and let you all know about the 2009 changes to the FHA and Conforming loan limits. We made a post about these changes at our Southwest Florida Blog - HUD Announces New Permanent FHA Mortgage Loan Limits, but I also wanted to give you folks the HUD links so you can look up the new FHA and Fannie/Freddie loan limit changes for your own individual counties.

To find your counties 2009 loan limits, visit https://entp.hud.gov/idapp/html/hicostlook.cfm. Just choose your state, enter your county name and select the appropriate loan limit type and the limit year…

In another effort to help homeowners who are facing foreclosure, the Federal Housing Finance Agency (FHFA) announced a new plan to help speed up the process for renegotiating delinquent loans held by Fannie Mae and Freddie Mac. The plan, which will go into effect on December 15, provides guidelines for mortgage servicers to follow in modifying existing loans to help prevent future defaults. FHFA officials hope their new approach will become a model for all loan servicing companies and make it easier for them to also bring help to thousands of affected homeowners.

According to the Mortgage Bankers Association, more than 4 million homeowners were either behind on their payments or somewhere along in the foreclosure process at the end of June. That's 9% of…

In a historic, yet widely anticipated, move yesterday Secretary Henry Paulson announced plans to put Fannie Mae and Freddie Mac under government custody. The unprecedented move by the Treasury includes replacing both company's CEOs, ending all stock dividends, and creating a new preferred stock that will be senior to all other outstanding shares.

The authority for such a move was granted to the U.S. Treasury in the recently passed Housing and Economic Recovery Act and was included in the bill to help protect the $5.4 trillion in outstanding mortgages the companies currently hold. Both Government Sponsored Entities (GSEs) have been under severe pressure over the last year. Their stock shares have fallen over 90% and the markets have had severe doubts about…

There appears to be a fair amount of confusion over the new First-Time Home Buyer Tax Credit that was included in the recently passed Housing and Economic Act of 2008. Quite frankly, it is not surprising. While driving over this past holiday weekend, we heard at least four different radio ads by various companies and all of them made it seem like this program was a free ride. The reality is something else altogether.

Here’s how the program actually works:

• To be eligible, home buyers must not have owned a home for the last three years. The ownership test applies to both partners in a marriage.
• The tax credit (refund) will be equal to 10% of the purchase price of the property up to a maximum of $7,500.
• The tax credit (refund) is $3,750 for…

The Department of Veterans Affairs (VA) is raising ceilings on its no down payment home loans from the current $417,000 to as much as $729,000. The increases are effective immediately under legislation recently enacted by President Bush's signing of the Housing and Economic Recovery Act of 2008.

The new law also improved the VA’s Specially Adapted Housing Program. It raises primary grants from $50,000 to $60,000 toward constructing a new home or modifying an existing home to meet the needs of veterans or active duty service personnel with certain service-connected disabilities. Additional new features to this program are a provision that allows veterans with certain service disabilities arising from severe burns to receive the adaptive housing grants and…

Well, our illustrious leaders in Washington have finally passed the long awaited new housing bill (H.R. 3221 - Housing and Economic Act of 2008). While we're not positive how much it will help the overall housing market (other than ensuring the GSE's won't fail), it is chock full of new regulations and sure to cost taxpayers millions of dollars. You can read about provisions included in it at - New Housing Bill Set to Become Law This Week.

Now that it's ready to become law, the questions are "who is eligible" and "what are the requirements" ailing homeowners must follow in order to take advantage of the Foreclosure Prevention Act of 2008. The following is a synopsis of the requirements that must be met.

Eligibility:

• Qualified borrowers must live…

In another sign of the times for the lending industry, Wachovia Mortgage announced last evening it is going to discontinue its wholesale lending operations for third party originations. The decision will be effective July 25, 2008, which will be the last date on which Wachovia Mortgage will accept any new loan applications for wholesale funding.

The announcement came via email and was not only a surprise to its lending partners but also to its wholesale lending account executives and staff. The memo stated that Wachovia has "evaluated its business model" and as a result of a new strategic direction the company "will primarily focus on customers who have relationships with the bank, and who are located in geographies where Wachovia branches are…

The Federal Reserve Board announced yesterday morning it has approved the long awaited final rule amending Regulation Z (Truth in Lending) which it believes will help protect consumers by promoting responsible lending practices. According to Fed Chairman Bernanke, "the new rules will apply to all mortgage lenders and should protect consumers by prohibiting unfair, abusive or deceptive home mortgage lending practices." In addition the new rule also sets additional advertising standards and requires certain disclosures to be given to consumers earlier in the mortgage transaction process.

Highlights of the final rule include the following:

1.  The definition of "higher-priced mortgage loans" (secured by a consumer's principal dwelling). This new defined…