Mortgage and Home Financing News
The mortgage industry has never seen so much news since our country declared it's independence in 1776. Unfortunately, most of the news this year has been very negative as bank after bank has been seized by the US government. Not since the great depression has our country seen so many failed banks. As a result the mortgage market has experienced even tighter lending requirements. More equity and more documentation is required for nearly every type of home loan. After Fannie Mae and Freddie Mac failed, FHA became the sole survivor for home purchase loans and refinancing nationally.
Recent Mortgage-related Articles
Homeowners struggling to avoid foreclosure have a potential new lifeline: Hope for Homeowners, outlined yesterday by the Department of Housing and Urban Development to allow strapped borrowers to refinance their mortgages into federally insured lower-rate, 30-year fixed loans. HOPE for Homeowners Act of 2008 is part of the Housing and Economic Recovery Act. It begins on October 1, 2008 and ends in September 2011. The Federal Housing Administration (FHA) would insure the program up to $300 billion.
> HOPE for Homeowners Act of 2008 for Foreclosure Prevention
Fed Makes Posts Billions to Battle Home Mortgage Crisis - The Federal Reserve and foreign central banks agreed to pump billions of dollars into the global financial system Monday to unlock tight lending that threatens to unhinge the U.S. economy. The Fed said the action is intended to "expand significantly" the cash available to financial institutions in an effort to relieve to the worst credit crisis since the Great Depression. Under the proposed program, the Federal Reserve will raise the amount of 84-day cash loans available to U.S. banks. The Fed promised to increase the amount to $75 billion up from the existing $25 billion starting on Oct. 6. Banks bid on a slice of the loans at an auction. That move will triple the supply of 84-day loans to $225 billion, from $75 billion, the Fed said. Meanwhile, the Fed will continue to make $75 billion worth of shorter, 28-day loans available to banks. At the end considering amount of cash loans available to banks will double to $300 billion from $150 billion, the Fed said. The Federal Reserve actions come as Congress and Bush move on with proposed $700 billion financial bailout plan. The near trillion dollar bail-out aims at clearing the dangerous credit bottle-neck that threatens to freeze up the financial banking system and throw the economy into a recession. At the heart of the plan, the government would purchase bad home mortgages and other non-performing debts held by banks and other mortgage companies. Now they must see if the bill passes.
> Read related articles, House Defeats Bill
The House on Monday defeated a $700 billion emergency rescue package, ignoring urgent pleas from President Bush and bipartisan congressional leaders to quickly bail out the staggering financial industry. Stocks plummeted on Wall Street even before the 228-205 vote to reject the bill was announced on the House floor.
> Bailout Defeated in House Vote for 700 Billion
Citigroup agreed Monday to purchase Wachovia's banking operations for $2.1 billion in a deal arranged by federal regulators, making the Charlotte-based bank the latest casualty of the widening global financial crisis.
> Citigroup Buys Wachovia Banking
Bailout Includes Fixes for FHA Hope Program - The $700 billon emergency bailout bill Congress proposes this week includes several fixes for a special FHA home refinancing program to make it more attractive for mortgage lenders to help bad credit homeowners and simplify refinancing or modifying 2nd mortgages who could be hindering an affordable restructured monthly payment.
> See more articles regarding the FHA Hope
FHA Rates Rise and Loan Volumes Decrease - The government loans offer the best home financing solutions with FHA mortgages. New homebuyers like FHA loans for purchasing and current homeowners like FHA for streamline & cash out possibilities.
WAMU Gets Seized - Mortgage lenders banking risky mortgages like deferred interest and ARM home loans to report a significant increase of loan defaults have nearly destroyed the liquidity for consumer banks nationally.
FHA mortgage lenders would have to underwrite the mortgage to 85% Loan-to-Value. The FHA loan proposal would give lending-investors the option of taking a "quick hit or a slow bleed," one pundit of the bill remarked. It might also offer homeowners a new opportunity with an affordable FHA mortgage and a fresh start.