| Author |
Previous Topic | Next Topic |
|
cyborg7
116 Posts |
 Posted - 07/23/2008 : 11:06:12 AM
|
| Anyone able to summarize the bill that was passed by the house??, please explain it in plain English? Thanks:) |
|
cyborg7
116 Posts |
Posted - 07/23/2008 : 11:09:20 AM
|
| ttt |
|
|
nafinc1
3 Posts |
Posted - 07/23/2008 : 11:10:16 AM
|
Helping at-risk borrowers
The bill also aims to help homeowners at risk of foreclosure and to bolster regulation of Fannie and Freddie. Among other things, it would:
Increase the Federal Housing Administration's role. The FHA could insure up to $300 billion in new 30-year fixed rate mortgages for at-risk borrowers in owner-occupied homes if their lenders agree to write down their loan balances to 90% of the current appraised value of their homes.
Lenders would also agree to pay upfront fees to the FHA equal to 3% of a home's appraised value. Borrowers must agree to pay an annual premium to the FHA equal to 1.5% of their new loan balance and they must also agree to share with the government any profit they realize from selling or refinancing their home.
The cost of the new FHA program - which would begin on Oct. 1 and be in place for just a few years - would be funded by fees from Fannie and Freddie.
While the bill authorizes the FHA to insure up to $300 billion in new loans, the CBO estimates that the agency is only likely to insure up to $68 billion and help keep roughly 325,000 people in their homes. Those estimates were based on the CBO's assessment of who is likely to qualify under the program and who is likely to default and lose their home anyway despite being in the program.
Create a stronger regulator for the GSEs. The new regulator will have a greater say over how well funded the agencies are - a major concern in the markets that has sent stocks in both companies plunging.
Permanently increase "conforming loan" limits. The bill would permanently increase the cap on the size of mortgages guaranteed by Fannie and Freddie to a maximum of $625,000 from $417,000.
The FHA maximum loan limits for high-cost areas would also increase to $625,000.
Higher loan limits will make it easier for borrowers to get mortgages, because they're more likely to be traded if they are considered conforming.
Create home buyer credit. The bill includes a tax refund for first-time home buyers worth up to 10% of a home's purchase price but no more than $7,500.
The refund, however, serves more as an interest-free loan, since it would have to be paid back over 15 years in equal installments by the buyer.
The refund would be reduced gradually for single filers with adjusted gross incomes above $75,000; and for joint filers with AGIs over $150,000.
Bars down-payment assistance for FHA loans. The bill eliminates a program that has allowed sellers to provide down payment assistance. The seller-funded program is largely the reason why the agency's reserve has fallen by $4.6 billion, according to FHA Commissioner Brian Montgomery. Currently, that reserve is roughly $16.4 billion.
The bill would also increase to 3.5% from 3% the down payment requirement for borrowers getting FHA loans.
|
|
|
ski2313
749 Posts |
Posted - 07/23/2008 : 11:11:48 AM
|
Tonight the House and Senate reached agreement on a massive housing bill that affects FHA, Fannie and Freddie, tax policy and many changes involving the housing market. We have previously briefed you by conference call and email on the progress of several separate measures, but the housing and mortgage crisis has caused Congress to combine these provisions into a bill exceeding 400 pages. The House will vote on the measure tomorrow, with the Senate to follow by next week. The White House has supported much of the measure but has criticized some components. Despite a prior veto threat, we expect the President will sign this bill, with final action before the August congressional recess.
Here are the major components:
1. FHA Changes
Mortgage limits for high cost areas will be increased to $625,000 on a permanent basis (115% of the current conforming limit).
The FHA floor will go from 48% to 65% of the current conforming limit. This will put the new permanent floor at $271,000.
Cash downpayment is set at 3.5%.
The seller funded downpayment assistance program (DPA) will be terminated on September 30.
The risk based premium established by HUD last week will be suspended on September 30. The ceiling on upfront premiums will go to 3%.
2. Fannie and Freddie
The conforming loan limit will be increased to 115% of area median up to $625,000.
The bill provides for a federal "backstop" for Fannie and Freddie which allows the Treasury to capitalize the companies by taking an equity stake.
A new regulator with enhanced powers is created.
The bill creates an affordable housing trust fund paid for by assessments on Fannie and Freddie to help prevent foreclosures and facilitate affordable housing
3. FHA Rescue Fund
The bill creates a special FHA refinance program designed to allow the refinance into fixed rate FHA products of up to $300 billion in distressed mortgages.
4. Licensing
Encourages a nation wide licensing and registry system for loan originators by setting minimum qualifications and assigning responsibility to HUD for establishing new rules for those states that do not enact licensing laws.
5. Redevelopment of Foreclosed Properties
Provides $4 billion in funds for local governments to purchase and redevelop foreclosed properties.
6. Tax Incentives
Establishes a range of housing incentives, including a first time homebuyer tax credit and expands the Low Income Housing Tax Credit.
There is a great deal of detail in this complex bill and we will update you as more information is available.
|
|
|
mganovsky
2070 Posts |
Posted - 07/23/2008 : 11:27:55 AM
|
Create home buyer credit. The bill includes a tax refund for first-time home buyers worth up to 10% of a home's purchase price but no more than $7,500.
The refund, however, serves more as an interest-free loan, since it would have to be paid back over 15 years in equal installments by the buyer
It has been a long day, could some one explain how this "home buyer credit" would work.
is it a loan where the buyer gets cash back at closing or is it used for DPA or closing costs???
I seem to like every thing that was passed and that scares me!! |
|
|
cyborg7
116 Posts |
Posted - 07/23/2008 : 11:36:39 AM
|
| I have heard several brokers with the opinion (right or wrong) that this FHA reform my produce more short refi's. Is there any truth to this? |
|
|
cyborg7
116 Posts |
Posted - 07/23/2008 : 1:13:25 PM
|
| Webs - Please explain if you can .. thanks |
|
|
Bob H
300 Posts |
Posted - 07/23/2008 : 2:36:46 PM
|
If I read the bill correctly, the minimum standards for loan originators look something like this:
Fingerprinting
Credit Check
10 year detailed employment history
Minimum initial education and continuing ed
Criminal background investigation: 7 years w/ no felony convictions of any kind or gross misdemeanors involving financial crimes. Any felony conviction involving financial crime will be a lifetime ban on being an originator.
This is very similar to my State's requirements (Maryland). We had to go through all of this in the fall of 2006. The approval process was pretty serious. Maryland actually contacted all of my old employers going back 10 years to verify accuracy. Any false statement on my app was automatic denial (with right to appeal).
I can't see how these standards on a national level are a bad thing. The bill does leave the licensing process up to the States. The national registry is for tracking people only. |
|
|
VVance
2489 Posts |
Posted - 07/23/2008 : 3:37:04 PM
|
quote:
Originally posted by Bob H
If I read the bill correctly, the minimum standards for loan originators look something like this:
Fingerprinting
Credit Check
10 year detailed employment history
Minimum initial education and continuing ed
Criminal background investigation: 7 years w/ no felony convictions of any kind or gross misdemeanors involving financial crimes. Any felony conviction involving financial crime will be a lifetime ban on being an originator.
This is very similar to my State's requirements (Maryland). We had to go through all of this in the fall of 2006. The approval process was pretty serious. Maryland actually contacted all of my old employers going back 10 years to verify accuracy. Any false statement on my app was automatic denial (with right to appeal).
I can't see how these standards on a national level are a bad thing. The bill does leave the licensing process up to the States. The national registry is for tracking people only.
Why not subject all the corrupt CEO's and Wall Street insiders to the same minimum standards?...you know, the one's that really made the money and put us in the mess we're in? |
|
|
rychecky
87 Posts |
Posted - 07/23/2008 : 3:46:47 PM
|
| only a few people will get access to this program |
|
|
StayInHomeGuy
281 Posts |
Posted - 07/23/2008 : 3:48:44 PM
|
House Passes "The Most Important Housing Bill in a Generation"
Wednesday, July 23, 2008 -
WASHINGTON, D.C. - Kieran P. Quinn, CMB, Chairman of the Mortgage Bankers Association (MBA) hailed the House of Representatives passage of the omnibus housing bill. The bill, which passed the House by a vote of 272-152, will now go to the Senate - where leaders have indicated it will pass - and then to President Bush, who has stated he will sign it.
"This legislation will do so much good for so many people," said Quinn. "The FHA modernization and GSE oversight reform provisions will help stabilize the housing market. The FHA rescue plan will help thousands of families across the country refinance their mortgage and stay in their homes, while the tax incentives will encourage potential buyers to get off the sidelines and help stabilize home prices. And the GSE backstop provisions will help quell the turmoil in the credit markets.
"And not to be overlooked is an effort by Chairman Frank and Chairman Rangel to spur development of affordable housing by harmonizing the Low Income Housing Tax Credit and FHA multi-family insurance programs. This is a cost free way to make these two important programs work together to build more affordable housing across the country."
"Considering the current state of the real estate, mortgage and credit markets, I can confidently say this is the most important piece of housing-related legislation that we have seen in more than a generation. It will help stabilize the mortgage market, stop the downward spiral of home prices in parts of this country and provide additional tools for lenders to work with borrowers to avoid foreclosure whenever possible."
Among the provisions in the bill:
FHA Modernization: Authorizes a $25 million appropriation to improve technology, processes, program performance, eliminate fraud and provide appropriate staffing. Effective January 1, 2009, it also increases the FHA loan limit to the lesser of 115 percent of the local median home price or $625,500 with a floor for lower priced markets of $271,000, establishes a 12-month stay on FHA's proposal for risk-based premiums, sets the down payment requirement at 3.5 percent and prohibits seller-funded down payment assistance (both direct or through a third party).
GSE Oversight Reform: Creates a new regulator (five-year term, appointed by the President, confirmed by the Senate) with oversight authority similar bank regulators, establishes a new affordable housing fund and capital magnet fund to be funded by a 4.2 basis point fee on all new loans, significantly changes the affordable housing goals and raises the conforming loan limit to the higher of $417,000 or 115 percent of the local median home price, not to exceed $625,500 (the stimulus limits remain in effect until January 1, 2009).
FHA Rescue: Creates a voluntary program for lenders to write down the loan balance in exchange for an FHA guaranteed loan not to exceed 90 percent of the newly appraised value of home. The lender would pay a 3 percent FHA loan origination fee. To qualify, the borrower must have a debt-to-income ratio above 31 percent on the original loan. The program is capped at $300 billion.
Tax Incentives: Creates a $7,500 refundable tax credit for first-time home buyers, expands the volume cap for the low income housing tax credit, allows for tax-exempt treatment of bonds guaranteed by the Federal Home Loan Banks and exempts the low income housing tax credit from the alternative minimum tax.
Low Income and Affordable Housing: Encourages the development of low-income and affordable housing by harmonizing multi-family FHA mortgage insurance programs with the low income housing tax credit. Allowing these two programs to work together will result in more effective uses of both programs.
GSE Backstop: Authorizes the Treasury Secretary to temporarily increase the GSEs' line of credit and to, if necessary, buy equity in the GSEs in order to provide confidence to credit markets. Also provides a role for Treasury and the Federal Reserve in GSE oversight to ensure safety and soundness.
TILA Reform: Requires TILA disclosures to be delivered seven days prior to loan origination, requires that disclosures include examples of how payments would change based on rate adjustments in addition to disclosing the maximum possible payment under the loan terms and mandates that the consumer receive early disclosures before paying anything more than a nominal fee that covers the cost of a credit report.
Empowering States: Raises the cap by $11 billion on tax-free bonds that state housing finance agencies may use to help at-risk homeowners by refinancing troubled loans and appropriates $4 billion for states to purchase and renovate abandoned and foreclosed properties.
Licensing: Encourages state officials to create a national licensing system for residential loan originators, allows HUD to create a licensing system for those states that fail to enact their own, establishes minimum qualifications for all loan originators and requires federal regulators to create a registry for banks and thrift employees who originate loans.
|
|
|
HonestNJBroker
336 Posts |
Posted - 07/23/2008 : 3:54:06 PM
|
| I;m sorry I don't see this really helping anyone, or am I just not reading it correctly? |
|
|
VVance
2489 Posts |
Posted - 07/23/2008 : 3:58:52 PM
|
quote:
Originally posted by HonestNJBroker
I;m sorry I don't see this really helping anyone, or am I just not reading it correctly?
Nothing wrong with your reading skills. |
|
|
HonestNJBroker
336 Posts |
Posted - 07/23/2008 : 4:09:13 PM
|
Thank God, I thought I was missing something.
Nothing wrong with your reading skills.
[/quote] |
|
|
StayInHomeGuy
281 Posts |
Posted - 07/23/2008 : 4:42:02 PM
|
quote:
Originally posted by HonestNJBroker
I;m sorry I don't see this really helping anyone, or am I just not reading it correctly?
This bill is going to help alot of people. That is fact. |
|
|
HonestNJBroker
336 Posts |
Posted - 07/23/2008 : 4:46:07 PM
|
Who is this going to help? Someone who can talk their current bank into writing the loan down to 90LTV? What do you think their credit looks like? Can they qual under FHA tough guidelines? i.e DTI-Full DOC
quote:
Originally posted by StayInHomeGuy
quote:
Originally posted by HonestNJBroker
I;m sorry I don't see this really helping anyone, or am I just not reading it correctly?
This bill is going to help alot of people. That is fact.
|
|
|
mojojojo_1
843 Posts |
Posted - 07/23/2008 : 5:01:47 PM
|
| when does this go into effect. am i going to wake up tomorrow with new rate sheets with all the lenders offering 625K or less at 6.5 at par? (conforming rates, not jumbo conforming) |
|
|
cspatmon
2142 Posts |
Posted - 07/23/2008 : 6:00:09 PM
|
| I'm sorry it sounds like an extension of the FHA Secure. Until proven I'm skeptical about how many homeowners that will actually benefit. |
|
|
TheBigGuy
392 Posts |
Posted - 07/23/2008 : 6:04:26 PM
|
quote:
Originally posted by mojojojo_1
when does this go into effect. am i going to wake up tomorrow with new rate sheets with all the lenders offering 625K or less at 6.5 at par? (conforming rates, not jumbo conforming)
No, I suspect you will see little or no change in the Confumbo loans. |
|
|
TheBigGuy
392 Posts |
Posted - 07/23/2008 : 6:08:06 PM
|
quote:
Originally posted by StayInHomeGuy
quote:
Originally posted by HonestNJBroker
I;m sorry I don't see this really helping anyone, or am I just not reading it correctly?
This bill is going to help alot of people. That is fact.
You keep saying that in every thread. Time for you to explain how???? It will be a bigger flop than FHA Secure |
|
|
VVance
2489 Posts |
Posted - 07/23/2008 : 6:20:09 PM
|
quote:
Originally posted by StayInHomeGuy
quote:
Originally posted by HonestNJBroker
I;m sorry I don't see this really helping anyone, or am I just not reading it correctly?
This bill is going to help alot of people. That is fact.
It's not a fact. I'd be willing to bet this will hurt 100 fold over evry person it helps. This seals a massive tax increase to the citizens who had nothing to do with this.
The only explanation I could think of is that the banking system in this country is probably on life support, far worse then being publicized. Perhaps the FDIC saw the potential for it to run out of funds. If that was the case, this bank, taxpayer subsidized, bailout might have seemed the only way out.
Regardless, this whole thing, from B of A writing the initial bill to the kickbacks to powerful Senators, was not done for the good of the American People. The bottom line, instead of a bank losing 30-40% on a foreclosure, the losses are limited to 10%, with the remainder paid by you, me, our kids and their kids.
Last, this sweeet heart deal also includes the Billions and Billions of equity lines which are worthless at present.
Unless the Government is planning on purchasing houses too, these same modifications will end up back in foreclosure anyway.
|
|
|
VVance
2489 Posts |
Posted - 07/23/2008 : 6:41:45 PM
|
I don't believe it...they are moving into the real estate business!
From a CNN article...
Give grants to states to buy foreclosed properties. The bill would grant $4 billion to states to buy up and rehabilitate foreclosed properties. The funding had been opposed by the White House, which said it would benefit lenders and not homeowners. But given the administration's push to get a Fannie and Freddie rescue proposal in place quickly, Democratic leaders decided to keep the provision in the bill, sensing the president wouldn't kill the bill over it given its other priorities.
|
|
|
edunn
116 Posts |
Posted - 07/23/2008 : 6:55:36 PM
|
TILA Reform: Requires TILA disclosures to be delivered seven days prior to loan origination,
Boy, now it's really rocket science...7 days PRIOR to loan origination???
Fingerprinting
Credit Check
10 year detailed employment history
Minimum initial education and continuing ed
Criminal background investigation: 7 years w/ no felony convictions of any kind or gross misdemeanors involving financial crimes. Any felony conviction involving financial crime will be a lifetime ban on being an originator.
This is very similar to my State's requirements (Maryland). We had to go through all of this in the fall of 2006. The approval process was pretty serious. Maryland actually contacted all of my old employers going back 10 years to verify accuracy. Any false statement on my app was automatic denial (with right to appeal).
I can't see how these standards on a national level are a bad thing. The bill does leave the licensing process up to the States. The national registry is for tracking people only.
[/quote]
Why not subject all the corrupt CEO's and Wall Street insiders to the same minimum standards?...you know, the one's that really made the money and put us in the mess we're in?
[/quote] |
|
|
VVance
2489 Posts |
Posted - 07/23/2008 : 7:23:45 PM
|
quote:
Originally posted by edunn
TILA Reform: Requires TILA disclosures to be delivered seven days prior to loan origination,
Boy, now it's really rocket science...7 days PRIOR to loan origination???
Fingerprinting
Credit Check
10 year detailed employment history
Minimum initial education and continuing ed
Criminal background investigation: 7 years w/ no felony convictions of any kind or gross misdemeanors involving financial crimes. Any felony conviction involving financial crime will be a lifetime ban on being an originator.
This is very similar to my State's requirements (Maryland). We had to go through all of this in the fall of 2006. The approval process was pretty serious. Maryland actually contacted all of my old employers going back 10 years to verify accuracy. Any false statement on my app was automatic denial (with right to appeal).
I can't see how these standards on a national level are a bad thing. The bill does leave the licensing process up to the States. The national registry is for tracking people only.
Why not subject all the corrupt CEO's and Wall Street insiders to the same minimum standards?...you know, the one's that really made the money and put us in the mess we're in?
[/quote]
[/quote]
I hadn't read about credit checks. Let see...Minimum FICO for all Mortgage Brokers 840...
Bank LO's 480... |
|
|
toddblue
2397 Posts |
Posted - 07/23/2008 : 8:01:24 PM
|
I'm in an area untouched by the foreclosure problems other areas are experiencing. There were very few option arms, or stated loans done in this part of the world either. And we're remianing stable on home values.
But we are still facing the same lending constraints as everyone else, even though we're not a root cause of the mess lending is in today. And like everyone else, it adversly effects my business.
I'm sure others of you are sharing my frustration. It's a shame so many good brokers and LO's are being hamstrung by the abuses and 'irrational exuberance' of a market gone wild.
Outside of national licensing (that I believe will help clen out those bad apples that are still here) I see nothing in this bill that rewards us that were competent in our lending duties. It only tightens things further with more government intervention and rewards lenders and borrowers for their por judgement and decisions. |
|
|
contraman
1 Posts |
Posted - 07/23/2008 : 9:18:56 PM
|
quote:
Originally posted by cyborg7
I have heard several brokers with the opinion (right or wrong) that this FHA reform my produce more short refi's. Is there any truth to this?
yes there is truth to this. We are working with 20 lenders now who are on board for the principal reduction mortgage, go to www.shortrefime.com |
|
|
Loan Guy
24 Posts |
Posted - 07/23/2008 : 9:24:34 PM
|
| This is freakin stupid! More bureaucratic BS that won't fix a thing. How is increasing the down payment requirement on FHA going to help the housing market? And doing away with DPA? Give me a break already. Good job Washington. |
|
|
yldspread
458 Posts |
Posted - 07/23/2008 : 10:01:49 PM
|
| It doesn't get any better, I did like 6 DPA's this year. I was looking forward for more. |
|
|
Mandyvilla
3444 Posts |
Posted - 07/25/2008 : 3:19:20 PM
|
I am doing some research this weekend on this......the way I heard the Rescue will work (rumor and innuendo), customer has home worth 400K, owes 500K, he can do a 96.5% LTV FHA loaon on the value WITH ANY LENDER. The difference is part of the "rescue" and the difference is set aside. I can't remember the formula I read, but it gets paid back upon sale IF THERE IS EQUITY. (Minimum time? Sorry, don't remember). The increase in insurance will fund it.....Owner occupied only and due on sale if ever a rental (to stop the refi and rent crowd)......there were strings, many, but it was similar to the reverses, if the equity is not there at time of sale, it's not owed.
LOL, if I remembered wrong, either I went down a rabbit hole or someone slipped something in my drink. This sounds good to me......as long as I and other tax payers are not funding it. |
|
|
StayInHomeGuy
281 Posts |
Posted - 07/25/2008 : 4:18:06 PM
|
quote:
Originally posted by TheBigGuy
quote:
Originally posted by StayInHomeGuy
quote:
Originally posted by HonestNJBroker
I;m sorry I don't see this really helping anyone, or am I just not reading it correctly?
This bill is going to help alot of people. That is fact.
You keep saying that in every thread. Time for you to explain how???? It will be a bigger flop than FHA Secure
I have a laundry list of seniors who are hurting in the worst ways. Some of the stories I hear could bring ttears to your eyes. These people want and need a reverse but don't qualify based on the current FHA lending limits. Now they do, they can keep their homes, and don't have to make decisions like : Do I buy groceries or the medications I need?
There is your explanation. This bill WILL help alot of people, it is FACT.
Sorry, but I am truly passionate about what I do, and alot of these folks are living horribly, now they don't have to. Even if this is one of the few positives in this bill, it is positive.
Tell me how it will help anybody in our business if banks start shutting down left and right, if foreclosures go any higher which will continue to send values down. I just read that foreclosures are up THREE fold in comparison to 2Q 2007, that is scary.
One thing I know for sure is that the solution IS NOT to stand by and do nothing. |
|
|
| |
Previous Topic | Next Topic |
|
|
|
Search for: 
