New Face for the HUD
By admin on June 7, 2007
New face for the HUD is sought in bringing about change to the housing industry. Since 1986 the total number of employees has shrunk by 1,400 and those that are left speak of lack of leadership and vision.
“Eighty percent of us came to work for HUD because of the mission. We’re not satisfied with mediocrity,” said Federoff, who is president of Council 222 of the American Federation of Government Employees (AGFE). “It is not pleasant to come to work and have to face customers with legitimate requests and legitimate needs, and be the front line for HUD’s endless excuses.”
Many of the individual agencies that have worked in cooperation site competitive tendencies when working together with the HUD,
“They did not want to be our partner. They treated us like the enemy,” the former director said.
Even housing developers don’t feel the desire to work the HUD anymore due to the cost and the overall irritation it causes.
“HUD has become such an entrenched bureaucracy that it is no longer effective and cannot be fixed. The cost of dealing with HUD has reached the point it where it just isn’t worth it anymore,” said a senior executive of a private housing development and management firm who has worked with FHA programs, including the Sec. 236 program, since 1975.
To find out the list of top ten ways to fix the HUD you should check out this site, http://www.housingfinance.com/ahf/articles/2007/jul/REINVENTING0707.htm.
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Double-dare. Physical Challenge!
By admin on June 5, 2007
Want to know what challenges face today’s home buyers? U.S. HUD Secretary Alphonso Jackson said that subprime loans, loss of confidence by consumers, and predatory lending practices are the obstacles.
“Predatory lenders have targeted home buyers – especially minorities – and successfully manipulated many of them into unwarranted, illegal, or unethical loans,” Jackson said. “HUD will continue to aggressively pursue any predatory lender. Consumers must also be empowered with the tools to be able to read and understand the fine print and know when to ask for help.”
Jackson acknowledged many of the problems facing both borrowers and lenders and feels it is important to find solutions in the industry to protect homeownership.
FHA Loan are one possible solution as current borrowers of subprime loans may have a way out by refinancing their subprime loan into an FHA loan.
“One way to do this is by modernizing the FHA,” Jackson said. “We need this reform now. If Congress passes FHA reform, we could help hundreds of thousands of families and we could do so without cost to the taxpayer.”
Watch as more updates about the FHA modernization act are presented.
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Homeownership Month? Who knew?
By admin on June 4, 2007
In case you missed the memo, June is Homeownership Month. Alphonso Jackson, Secretary of the U.S. Department of Housing and Urban Development will speak at a press conference today to kick off the month. Secretary Jackson plans to address the need to educate consumers on the home buying process, helping out those that have found their way into trouble, and point out the significance the bill to modernize the FHA could be a safe alternative to subprime mortgages.
“Throughout this month-long campaign we are taking our message of promoting and protecting homeownership to communities nationwide,” said Jackson. “All Americans should have the opportunity to achieve the dream of buying a home – and once they do, we want to ensure they stay in it. Educating families about the homebuying process and helping those homeowners who may have hit a bump in the road is critical to ensuring a house remains both a home and a secure and stable investment.”
The theme of this year’s celebration is “Promoting and Protecting Homeownership” and is designed to encourage first-time homebuying and educate current homeowners on the responsibilities that come with homeownership.
HUD’s FHA programs have helped more than 34 million since the program started in 1934. The modernization of the FHA is seeking to increase loan limits to reflect the rise in current housing costs which will provide a safer alternative to a subprime loan.
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Mortgage Company helps Vets
By admin on May 31, 2007
In keeping with my last post and for the of week of Memorial Day I found this nice little article.
It appears as though a VA Loans company decided to hold a scholarship competition to Veterans to describe the reason why they served. This could be a person going to college now or even for their children going to college. This was a really great thing for the VA Mortgage Center to do and I applaud them on stepping up for Veterans and their families.
The VA Mortgage Center.com has announced the three winners of its first annual Military Education Scholarship Program. The winners, John Parker, Stacey Lang, and Ann Marie Little will each receive $1,000 from the VA Mortgage Center.com to be used towards educational funding.
The scholarships were awarded based on essays written on the topic, “Why I Chose to Serve.” The submissions covered a wide range of themes from educational benefits to life skills to spiritual growth. Entries were judged based on quality of the writing, uniqueness, and overall appeal. The contest was open to current and prospective ROTC students, active-duty personnel with plans to attend college, honorably discharged veterans currently attending or with plans to attend college, and the children of veterans or active-military personnel.
All of the essays were a testament to the strong character of the men and women serving our country. The three winners stood out as dedicated individuals and excellent writers.
“It was great to see such a talented pool of applicants,” said Matt Wanserski, one of the contest judges and a loan officer within the company. “All of the essays were a testament to the strong character of the men and women serving our country. The three winners stood out as dedicated individuals and excellent writers.”VA Mortgage Center.com is one of the leading providers of VA loans and other related lending products in association with the VA Lending Program. The scholarship program has been funded 100% by the employees of the VA Mortgage Center.com to show their support for the servicemen and women.
For additional information, please contact Nathan Long or visit www.vamortgagecenter.com
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Thank a Veteran and those that serve
By admin on May 25, 2007
With this weekend being Memorial Day weekend I thought I would make a quick shout out to thank all the men and women who have served our country or are currently serving our country throughout the world, thank you. My father is a Vietnam Veteran and both of my grandfathers served in World War II and I take great pride in knowing they served for us.
Currently President Bush wants to give a 3% pay raise to our men and women serving but Congress wants to give them a 3.5% pay increase. Why the discrepancy? Well, Bush feels that being paid $15,617 is compensation enough along with all the other benefits they receive. When military personnel are honorably discharged they receive many great benefits including money for college in the form of the GI Bill and are eligible for a home loan in the form of a VA Home Loan. This may be the case but when you give private companies the same increase I don’t think that is fair.
“Considering the sacrifices that our military families make, the Democratic proposal to provide the troops with the pay raise they deserve and an increase in benefits for the spouses they may leave behind is one small way that we can support our troops,” the leadership wrote in a joint letter to Mr. Bush.
I will say that the VA Loan program is one of the greatest benefits to military veterans. Those individuals who served our country proudly and had little time to build credit or save much for a down payment are then eligible for a competitive interest rate while having very little credit.
Take time to thank a veteran and to think about those that are currently engaged in combat.
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Natural Selection at work in the Mortgage industry
By admin on May 23, 2007
Darwinism in the Subprime market? A “natural selection” process or correction is rippling through the Subprime lending market.
We have already seen tighter credit standards becoming the norm and higher interest rates are bringing home sales down in total. Loan production is predicted to be way down in comparison to years past. Many of the fly by night mortgage companies are always going the way of the dodo as the faith in subprime lenders is down.
What Lenders, Brokers and Consumers Can Do
Mortgage executives at realty affiliates offer the following advice in light of the latest flap surrounding subprime loans and other risky mortgage products:
• First and foremost, owner/brokers should be involved in their mortgage companies; if engaged in a joint venture, they should sit down with the venture partner and discuss the lending model being used.
• Lenders should educate agents in their realty firms about the consequences of putting people in homes they really cannot afford; now is a good time to also talk about mortgage insurance as an option.
• Consumers should be made fully aware of what they’re doing. If customers have no doc loans, they should be given separate disclosure statements that identify the loans and reveal that a lower mortgage interest rate loan could be obtained if more documentation is provided.
• Agents and lenders should talk to customers about getting qualified under the new standards and also discuss the pitfalls of subprime loans.
• Agents and lenders can also talk to customers about why they need to either improve their credit before trying to get a home loan or wait six months to build up enough money for an appropriate down payment.
A move to quality in mortgage lending could be in the future. The subprime mortgage may bounce back but with a higher detail to quality. Watch out for changes in the housing market in the future.
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Senator Clinton weighs in
By admin on May 21, 2007
Swift action against irresponsible lending practices is requested by Senator Hilary Clinton. Senator Clinton has called on Chairman Ben Bernanke to make move quickly to correct problems in the subprime lending industry which have contributed to the current problems in the housing market and growing number of foreclosures.
“Your optimistic forecast about the effect of the current housing market struggles should be encouraging,” Senator Clinton wrote to Chairman Bernanke. “Nevertheless, it remains clear that reasonable measures that will restore stability to the entire housing market and strengthen the American people’s confidence in what is oftentimes their most significant investment are still necessary.”
She revisited her initiative to help those with a subprime loan.
• Face-to-face financial counseling to be made available to more borrowers before they take out mortgages, and to homeowners at risk of foreclosure;
• Limiting the length of time for which prepayment penalties apply, and prohibiting prepayment penalties on mortgages with rates above a certain level;
• Strengthening the Truth in Lending Act and existing federal regulations to ensure that there is plain-talk, no-fine-print disclosure.
She has also reintroduced the 21st Century Housing Act which would help those drawn to the subprime industry to obtain a loan through the FHA.
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Let’s play the blame game!
By admin on May 18, 2007
Who is at fault for the Sub Prime fallout? Well that’s a coin flip, is the Housing Market to blame or can some of that burden fall on the Financial Industry as well. In the end, the housing market will bear the chore of fixing the problem itself.
Half of the Sub Prime loans were taken out to purchase homes to live in and the other half was taken out to fund other expenses such as inventing in the growing real estate market.
In today’s world, we must have a villain and a victim and the victim in many cases is the person who took out the loan itself. Many individuals purchased homes that were much too expensive for them but were coaxed by evil people that they could afford it. Riigght. Now many of these individuals are defaulting on their current loans and going through the foreclosure process.
But the financial market is feeling the pains of the fall out as well.
Lenders who took too much risk — or failed to know how much risk they had undertaken — are experiencing huge write offs. More than three dozen naïve or deceitful mortgage brokers have already closed. The origination volume of sub prime and other alternative mortgages has dropped nearly 40%.
The FHA is also looking to expand as it will soon issue larger mortgages. And congress may also impose stiffer penalties when mortgages laws are violated and even prohibit contract terms aimed to trap homeowners.
What does this all mean for future homeowners? Well with bad credit reserves on the rise, everyone will pay a higher mortgage rate and new homeownership rates will fall.
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Higher payments on your reverse mortgage
By admin on May 17, 2007
Do you have a higher valued home and are a member of the older generation of Americans in need of some help financially now that you are retired? Well there is a new reverse mortgage out just for your needs, the Prime Advantage. This option is set up for the higher valued homes with owners seeking to receive more cash than a traditional reverse mortgage with a fixed interest rate for the entirety of the loan.
With interest rates more than doubling over the past three years, many homeowners are uncomfortable with an adjustable rate,” said Robert Sivori, co- president, BNY Mortgage, an EverBank Company.
The Prime Advantage reverse mortgage offers a rate comparable to that of many conventional loans and requires no payments as long as you live in the home. The fact that the interest is set then the borrower actually knows exactly how much they will receive each month.
“A reverse mortgage is a powerful tool that can make a big difference in the lives of older homeowners, offering financial peace of mind and enabling them to live a more fulfilling life,” added Sivori. “Prime Advantage lifts the lending limits of a traditional reverse mortgage, while offering more money, more benefits, and more flexibility to owners of higher value homes.”
Check out the rest of the story here
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Subprime bailout, not FHA modernization
By admin on May 14, 2007
A bailout for the subprime industry is not exactly what the U.S. Department of Housing and Urban Development has in mind. The HUD is in full support of the FHA modernization to help out borrowers but is warning that a full blown bailout plan for the subprime market is not warranted.
HUD Secretary Alphonso Jackson expressed his sentiments at a press conference on Monday.
“FHA has been a blessing for so many people,” Jackson said. “However, reforms must be made for FHA to adapt to today’s marketplace. We have internally modernized FHA as much as we can. But, the time has come to bring FHA into the 21st Century. A new FHA could be an antidote for predatory lending and subprime difficulties.”
The HUD’s core belief in homeownership was reiterated by Jackson at the press conference as well as other beliefs which include the theory that homeownership is a long-term investment which should be without predatory and poor lending service in the mortgage industry. The proposed subprime bailout will “not resolve housing concerns” were Jackson’s final thoughts.
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