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Fannie Mae Gets Tough With Walk-Away Mortgage Defaulters
July 2010
Posted by Alex Finkelstein
The good times are gone for residential mortgage defaulters in the U.S. Fannie Mae has just changed the rules of the game for people who walk from their home loans, better known as strategic loan defaults. The government-owned agency that backs up loans from lenders says it will lock out borrowers from getting a new loan for seven years if they default on a mortgage they could afford to pay, the Wall Street Journal reports.
Under the new rules:
· The five-year waiting period is eliminated.
·Borrowers who can not document "extenuating circumstances" or show that they made an effort with their lender to avoid foreclosure will have to wait seven years to get a new loan.
· Those who can demonstrate hardship or attempted a workout with their lender may have to wait only three years.
· Fannie plans to step up legal actions to seek deficiency judgments in states that allow lenders to go after borrowers' other assets. In addition, Fannie will instruct its lender partners to monitor delinquent loans owned by Fannie, and recommend cases that warrant attention.
Fannie Mae is taking the new steps after finding:
· The majority of the defaulters are in Florida, Nevada and Arizona
· Nearly one in four homeowners with a mortgage is under water, or owes more than their home is worth, according to CoreLogic,
· A Morgan Stanley report estimates that around 12% of all mortgage defaults in February were 'strategic', meaning homeowners were financially able to pay on the loan but chose not to do so.
· In 2008, Fannie revised to five years from four the period that borrowers with a foreclosure must wait before they are eligible for a new loan.
The WSJ reports that even as Fannie Mae steps up penalties, the agency is preparing to reduce waiting periods for borrowers facing hardship who surrender their homes and avoid foreclosure.
Under previously announced rules that take effect next month, Fannie will reduce waiting periods to two years for borrowers who agree to transfer their homes to the company through a "deed in lieu of foreclosure," or who complete short sales, where homes are sold for less than the amount owed. The move to lock out borrowers from getting a new loan for seven years represents the latest effort by the mortgage industry to prevent a new wave of losses that could result if more borrowers who can afford their monthly payments instead opt to "strategically" default on loans, because they owe far more than their homes are worth.
"Walking away from a mortgage is bad for borrowers and bad for communities, and our approach is meant to deter the disturbing trend toward strategic defaulting," Terence Edwards, Fannie's executive vice president for credit portfolio management, said in a prepared statement.
Fannie's move comes amid greater concern that it has become socially acceptable for borrowers to stop paying their loans, and that such a shift could exacerbate the housing bust. Those worries are particularly acute in Arizona, Nevada, Florida and other hard-hit housing markets where it could take years for borrowers to return to positive equity.
Fannie Mae's smaller sibling, Freddie Mac, also requires borrowers with a foreclosure to wait at least five years. Foreclosures can stay on a credit report for up to seven years.
SENATE APPROVES HOMEBUYERS TAX CREDIT EXTENSION
June 2010
By ANDREW TAYLOR, Associated Press Writer Andrew Taylor, Associated Press Writer
WASHINGTON – The Senate on Wednesday approved a plan to give homebuyers an extra three months to finish qualifying for federal tax incentives that boosted home sales this spring.
The move by Senate Majority Leader Harry Reid would give buyers until Sept. 30 to complete their purchases and qualify for tax credits of up to $8,000. Under the current terms, buyers had until April 30 to get a signed sales contract and until June 30 to complete the sale.
The proposal, approved by a 60-37 vote, would only allow people who already have signed contracts to finish at the later date. About 180,000 homebuyers who already signed purchase agreements would otherwise miss the deadline.
Reid, D-Nev., added the proposal to a bill extending jobless benefits through the end of November. Nevada has the nation's highest foreclosure rate, and Reid is facing a tough re-election campaign.
The Realtors group has been pushing hard in Congress for the extension. Mortgage lenders, the trade group says, have been swamped with borrowers trying to get approved by the end of the month. Many potential borrowers are unlikely to make the deadline.
"If Congress fails to act promptly, then prospective homebuyers might not get the benefit of the homebuyer tax credit, even though they have completed contracts," the Realtors said a a letter to lawmakers.
First-time buyers were eligible for a tax credit of up to $8,000. Current owners who bought and moved into another home could qualify for a credit of up to $6,500.
The $140 million cost of the measure would be financed by denying businesses the ability to deduct from their taxes punitive damages paid when losing lawsuits or judgments.
Sally Andy and David Warren of Stirling Sotheby's International Realty Named Exclusive Sales, Marketing Agents for Joey Fatone's $5.5 Million Orlando Estate Residence
February 2010
FHA announces major changes January 20, 2010
January 2010
This morning The Federal Housing Administration (FHA) will announce a series of changes designed to protect the federal agency that has emerged as the cornerstone of the mortgage market as the housing sector wobbles toward recovery. Lenders will find these new rules painful but necessary. With FHA hovering around 40% of all new loan originations, even small changes have a major impact on the housing market.
Here are some of the changes:
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Minimum down payment increased to 10% for borrowers with FICO scores below 580 (in reality, this is minor, as few lenders will lend to a borrower with a sub 580 FICO anyway).
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Raise the upfront mortgage insurance premium to 2.25% (from 1.75%).
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Allow legislative changes to monthly mortgage insurance premium (currently.55% of the loan amount on an annual basis).
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Decrease seller concessions towards buyer closing costs from 6% to 3% of the sales price.
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Grade lenders on loan portfolio performance.
What did not change is the required minimum down payment, which currently stands at 3.5%.
First-time Home Buyers Help Orlando Area Home Market Improve To Levels Not Seen Since 2006.
July 2009
Congratulations to our entire Stirling Sotheby's team for a great performance in February. Although February was a short month, we still achieved $34.7 million in sales, which is approximately 35% above our January sales.
March 2009
David Warren Completes Technical Curriculum To Qualify As Certified Short Sale Specialist (CSP)
February, 2009
Previous Sally Andy News
July/August, 2007
City of Lake Mary recognized at one of the "Best Places to Live" by Money Magazine
In the August, 2007 issue of Money Magazine, the City of Lake Mary was voted as the #4 best place to live in the entire United States.
Links to articles:
June, 2007
Sally Andy recognized at one of Orlando's Top 100 Realtors by Orlando Magazine
The current issue (June 2007) of Orlando Magazine has recognized Sally Andy as being one of Orlando's Hot 100 realtors. Please see feature article below.
March, 2007
The Sally Andy Team of Stirling Sotheby’s International Realty hosts Lake Forest event!
Be sure and join Sally and her team for a special Lake Forest "Open Home" event this Sunday, March 25th from 2:00 to 4:00pm. Showcasing 4 of the most lovely homes Lake Forest has to offer.
In addition, there will be prize giveaways, including two $100 AMEX Gift Cards. Just register at any of the Open Homes - there's no obligation and winners will be notified after the event on Sunday.
We hope to see you there!
June, 2006
The Sally Andy Team of Stirling Sotheby’s International Realty sweeps annual awards event!
At Stirling Sotheby’s International Realty’s 17th Annual Academy of Performance Awards, the Sally Andy Team was honored with 7 major awards; including Sally’s winning of Stirling Sotheby’s top award, the “2005 Realtor of the Year”.
The gala ceremony was held at the luxurious Portofino Bay Resort at Universal Studios Orlando on Saturday, May 13th and recognized the company’s top achievers for the 2005 calendar year.
In the evening's major award category, Sally Andy won the coveted “2005 Realtor of the Year”. Sally said: “It truly is an honor to be recognized in this manner and I must first thank my team. They are all dedicated professionals who work day in, day out to provide top quality customer service to our valued clients. Also, the corporate management team and support staff at Stirling Sotheby’s is second to none; empowering each agent to be the best they can be. It is truly an honor to be a part of this dynamic organization.”
In addition to the prestigious “2005 Realtor of the Year” award, Sally was also honored as:
• Top Listing Executive – Heathrow Office
• Top Sales Executive – Heathrow Office
• Top Listing & Sales Executive Each Month of 2005 (Company-wide)
• Chairman’s Club Award
In the major surprise of the evening’s events, Sally’s Team Leader, David Warren won:
• Chairman’s Club Award
• 2005 Rookie of the Year
David’s Rookie of the Year award was a surprise to all in attendance due to the fact that he began with Sally’s team and Stirling Sotheby’s in mid-July 2005 and at that time was only a part-time agent! David did not join full-time until mid-October 2005. His unbelievable accomplishments (in less than 6 months) were strong enough to take him to the top of the “rookie” heap.
The final award of the evening, the “Outstanding Office of the Year” was won by Stirling Sotheby’s Heathrow office, fueled in large part by the Sally Andy Team’s 2005 performance.
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