Mark Daya- Foreclosure Prevention/ Short Sale Specialist

The Wall Street Journal

The Federal Housing Administration will exhaust its reserves over the coming year, according to budget projections released Monday, which would require a Treasury infusion for the first time in its 78-year history.
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http://online.wsj.com/article/SB10001424052970204795304577221222265037002.html?mod=WSJ_RealEstate_LeftTopNews

CNN Money

Federal officials hope to launch a pilot program in early 2012 to convert government-owned foreclosures into rental properties.
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http://money.cnn.com/2012/01/09/news/economy/foreclosures_rental/index.htm?iid=HP_River

HUD and the U.S. Dept. of the Treasury released the December edition of the Obama Administration’s Housing Scorecard this week.  Data in the Scorecard show some subtle improvements in the market over the past year, but underscore fragility as the overall outlook remains mixed. For example, new and existing home sales rose compared with the prior month and remain higher than a year ago, and homes are more affordable than they have been since 1971. Median-income families today have nearly double the funds needed to cover the cost of the average home.  However, home prices showed a slight dip from the prior month and remain below year ago levels.

The December Housing Scorecard features key data on the health of the housing market and the impact of the Administration’s foreclosure prevention programs, including:

• More than 5.5 million modification arrangements were started between April 2009 and the end of November 2011 – including more than 1.7 million HAMP trial modification starts and more than 1.1 million FHA loss mitigation and early delinquency interventions.
• Nearly 910,000 homeowners have received a HAMP permanent modification to date, saving an estimated $9.9 billion in monthly mortgage payments. The Administration’s programs continue to encourage improved standards and processes in the industry, with HOPE Now lenders offering families and individuals more than 2.6 million proprietary mortgage modifications through November.

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Some borrowers think that because their mortgage application is turned down the first time, they won’t ever be approved.  In reality, some borrowers succeed on the second or third attempt, usually with a different mortgage professional, and often several months later, after they have saved more money for a larger down payment or improved their credit score.

Making sense of the story

• Before reapplying for a mortgage, borrowers are advised to look at the reasons they were initially rejected.
• The Equal Credit Opportunities Act requires lenders to give loan applicants specific reasons in writing within 30 days of their decision.  If it’s based on a problem in the borrower’s credit report, the lender must tell the borrower the name and address of the credit agency that provided the information.
• Talking to the loan officer who denied the application to see how close the borrower was to being approved also can be helpful.  Sometimes the gap is small and could be bridged with a larger down payment or another home appraisal, for example.
• It also may be worthwhile to shop around for other lenders.  Borrowers can work with a mortgage broker or an online network like LendingTree or Zillow’s Mortgage Marketplace.
• A credit union also might be a better bet for some applicants.  Credit union loan committees may permit better deals for longtime members; they might also modify loan terms for borrowers they already know.
• However, first-time buyers may need to scale back their aspirations.  One reason people get turned down for a mortgage is because they try to buy more property than they can afford based on current incomes.
• Applicants also should look at ways to strengthen their financial picture.  If a borrower’s credit is poor, paying down credit-card balances can help to increase a FICO score. 

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http://www.nytimes.com/2011/10/16/realestate/mortgages-what-to-do-after-an-application-is-rejected.html?_r=1&ref=realestate