New Mortgage Rules Take Effect Friday

The rules that go into effect include the “ability to repay” rule, in which borrowers must have the financial means to be able to repay the loan amount. 

The Qualified Mortgage standard will also take effect. Qualified mortgages cannot be made to a borrower with a debt-to-income ratio of greater than 43 percent, Cordray explained. Qualified mortgages also cannot have certain risky features, “such as paying interest only or even negatively amortizing so that each month the consumer owes more than they did before and loans must have relatively reasonable points and fees,”  Cordr

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Chicago-area foreclosure filings rise in October

Foreclosure filings in the Chicago area rose 30 percent in October from a month earlier but remained well below their year-ago level, RealtyTrac reported.

In an area from Kenosha, Wis., to Northwest Indiana, 3,442 new foreclosure actions were filed last month, the company reported. That compared with 2,653 in September and 5,496 in October 2012.

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HAMP Program Show Homeowner Defaults Increasing

aparently around some 29% or 184,000 homeowners who have received HAMP modifications through the Troubled Asset Relief Program as opposed to through a government-sponsored enterprise (GSE) have re-defaulted. This has cost taxpayers $972 million in incentives that have been paid out to investors and servicer for these modifications. Approximately 26% or just under 154,000 borrowers participating in Since the government introduced its Home Affordable Modification Program (HAMP) approximately 1.25 million homeowners have had their loans modified, but worryinglymodifications.

 since then 27% have gone on to re-default on
these loans. These figures have come from a quarterly report to Congress and were compiled by the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP). According to the article in DS News, SIGTARP pointed to the Treasury that they should’ve heeded previous recommendations regarding the Home Affordable Modification Program, and that as far back as April the Inspector General had expressed concern over the increasing number of homeowners defaulting on permanent mortgage 

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ApGSE HAMP programs have re-defaulted. At the end of August another 10% of loans modified with HAMP were delinquent. Worryingly, the longer a homeowner has to remain in HAMP, the more likely they are to re-default. Amongst the oldest HAMP modification the re-default rate rises to 48.3%.

3 Big Reasons Why Home Sales Are Falling

What’s behind the drop in sales? NAR’s chief economist Lawrence Yun pinpoints three main factors: Higher mortgage rates, constrained inventories, and continuing tight credit.

1. Higher mortgage rates: The 30-year fixed-rate mortgage is up nearly a full percentage point in the past year, causing home buyers to face an increase in borrowing costs. The 30-year fixed-rate mortgage increased to 4.26 percent in November compared to a 3.35 percent average in November 2012, Freddie Mac reports. 

The Federal Reserve announced this week that it would begin winding down its bond-buying stimulus program next month, which is expected to result in higher mortgage rates. The average 30-year fixed-rate mortgage could likely rise to 5 percent or 5.5 percent next year, Yun notes. 

2. Tight credit: New rules defining Qualified Mortgage will take effect soon, and could leave more borrowers on the sidelines. “New underwriting rules to protect borrowers, effective in January, will prohibit many loan features, set tighter limits on the amount of debt a borrower can have and still get a mortgage, and require that lenders accurately measure a borrower’s ability to repay,” says Steve Brown, NAR’s president. “This means that qualified borrowers are getting a loan that they are very likely to be able to repay, but some borrowers may wind up paying much more for their mortgage, or not get a loan at all due to the tougher standards. The new rules may tighten

Expanded Medicaid’s fine print holds surprise: ‘payback’ from estate after death | Local News | The Seattle Times

As thousands of state residents enroll in Washington’s expanded Medicaid program, many will be surprised at fine print: After you’re dead, your estate can be billed for ordinary health-care expenses. State officials are scrambling to change the rule

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Lenders Urged to Improve Foreclosure Efforts

The Obama administration urged banks to improve their service of the government’s anti-foreclosure efforts through the Making Home Affordable Program and to use federal funds more effectively in helping to save struggling home owners from foreclosure.
The U.S. Treasury singled out CitiMortgage Inc., telling the bank it needed to make “substantial improvement” in its loan modification efforts through the Home Affordable Modification Program and to reach out to more home owners who are eligible to receive assistance.
The Treasury provides financial incentives to mortgage servicers under HAMP, which aims to encourage servicers to change the terms of struggling borrowers’ mortgages and lower their m

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