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New Standard Good Faith Estimate Effective January 2010
Today it was announced that HUD has adopted a new 3 page Good Faith Estimate as part of its RESPA reform package that will be standard among all lenders and go into effect in January of 2010.
The new standard Good Faith Estimate is part of a RESPA Reform package that has been in the works for years. Before the announcement, HUD reviewed approximately 12,000 comments and in considering these comments made changes to what was going to be a 4 page Good Faith Estimate.
According to Brian Montgomery, HUD’s Assistant Secretary of Housing:
“We have carefully considered the concerns expressed from every corner of the mortgage market in developing this rule. I am convinced that we successfully balanced the needs of consumers with those in the business of homeownership. None of us can lose sight of the fact that millions of Americans simply don’t understand all the fine print of their mortgages and this, in many respects, is at the heart of today’s mortgage crisis.”
Personally? I think it is a good idea. It will help standardize information that the consumer is getting from different lenders so that the consumer can make an informed choice and more easily match up the Good Faith Estimate with the Final HUD-1.
See the new Good Faith Estimate Form.
See the new HUD-1 Settlement Statement Form.
Ignite Phoenix: 5 Minutes Sometimes Feels Like 5 Hours
I received an email yesterday that read:
Congratulations! Your idea submission was selected to be given at Ignite Phoenix #2 on October 29th!
Fun!
Maybe it was the catchy title that the judges liked who were selecting people to present:
“Not Using The Web For Marketing - How I Went Broke.”
So, if you have *at least* an extra 5 minutes and want to know how important the web is to use in your overall marketing efforts, be sure to attend Ignite Phoenix #2!
See you on the 29th…
Arizona Mortgage Team Podcast On PhoenixHousingBlog.com
Want to hear more about some of the latest hot-topics in the Arizona mortgage scene?
Be sure to listen to our podcast with Candace Robinson of PhoenixHousingBlog.com where we talk about many of the things on people’s minds including:
- The $700 billion bailout and what people are saying about it
- The FHA Hope For Homeowners program
- What you can do if you owe more than your house is worth
- What loan programs are extinct or endangered
- Loan modifications - what they are and what is happening with them
- What can a buyer do to increase their chances for a loan approval
- How to find a good loan officer
- When Tammy predicts “things will turn around” (be sure to listen to this segment starting at 27:58!)
A special thanks to David who produced the podcast and Candace who was an excellent interviewer!
FHA Hope For Homeowners Program
When the Housing and Economic Recovery Program of 2008 was passed in late July, we wrote about the Hope for Homeowners Program. Some of the highlights of the program include:
- The program is a voluntary program for lenders to participate in
- Lenders will reduce the amount of money that they are willing to accept to pay off your current mortgage (this has become known as a “short-refinance”)
- A new mortgage will be issued by the new lender based on your current homes value
- FHA will share in the appreciation of the home, not the lender who took the loss
- FHA will collect a 3% “exit fee” when you sell the home or refinance it
Are lenders happy with this program? Ummm…. It doesn’t look like it.
According to the Assistant Secretary for Housing at HUD Brian Montgomery:
“I think lenders will be enthusiastic about the program but they have other things they’d like to do before they do a principal write down”.
What are the signs that lenders are less-than-excited about the Hope for Homeowners program?
- There is no official list published of lenders who are participating in the program
- There is no standardized method of working with these lenders — so each scenario with each lender is handled on an individual basis
- There is growing sentiment among the lenders that any other loss mitigation method (loan modification or workout) is financially better for the current lender than the Hope for Homeowners program
Even Sheila Bair, who heads the Federal Deposit Insurance Corporation, praised the FHA program but said that few borrowers with IndyMac, the bank that the FDIC took over in July, would use it.
She said that her responsibility to maximize profits for the investors would probably limit the number of IndyMac borrowers who would take advantage of the Hope for Homeowners program.
Don’t be surprised if you are interested in participating in the Hope for Homeowners program and you end up getting a loan modification or loan workout from your lender.
What Recent Changes In The Financial Markets Mean To You: Lock. Now.
What an interesting time to “unplug”. I have been “out-of-pocket” for about a week and a half and during that time, more happened in the financial markets than could be explained in a single post.
But, in case you missed it, During the last couple of weeks, some of the major changes in the financial markets included:
Lehman Brothers filed for bankruptcy
AIG was bailed out by the Federal Government
Bank of America bought Merrill Lynch
Congress is planning on giving Treasury Secretary Hank Paulson a line of credit that he can use to purchase up to 700 Billion of “bad mortgage debt” at any one time. (Note the part in section 6 of the Treasury’s proposal where it says that the maximum amount is 700 Billion at any one time — meaning it is possible to buy and sell, buy and sell TRILLIONS if Hank Paulson decides to”)
And those are just the highlights!
So what does all of this mean to you if you are currently trying to refinance your existing home or purchase a new one?
I don’t know for sure…
But if someone says that they know that guidelines are going to get easier and rates are going to be lower in the future, they must know something that we don’t.
The trend has been that guidelines are getting tougher during the last year or so and when I look into my crystal ball, I don’t see them getting easier anytime soon.
And guidelines matter more than rates.
As far as rates?
They may go lower, they may go higher — but — if you control the downside risk, the upside rewards will generally take care of itself — so we are coaching our clients to lock now if they have a loan in process.
And hold on for a wild-financial-ride over the coming months as the dust settles from all of the recent changes.
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Arizona Mortgage Newsletter
