Thursday, January 29, 2009
It may now be possible to lose one's home to foreclosure and remain in residence as a renter. From the Associated Press today:
Mortgage finance company Freddie Mac said it will allow some borrowers to rent out their homes after losing them to foreclosure.
The goal of the new policy, announced Friday, is to prevent properties from becoming vacant so they won't fall into disrepair.
Freddie Mac also said it will allow renters to remain in their homes even if their landlord enters foreclosure. The McLean, Va.-based company currently has about 8,500 properties in the foreclosure process, but many of those are vacant.
"Keeping foreclosed properties occupied and in better repair will support local property values and promote a faster recovery in the housing market," said Freddie Mac Chief Executive David Moffett.
As many California communities have discovered, foreclosures can be a blight on neighborhoods.
Under Freddie Mac's new policy, tenants and former property owners need to demonstrate that they have enough income to pay the rental bill. Freddie Mac also said it would consider reinstating a mortgage for those borrowers who can qualify for a modified loan.
Also of note:
Both Fannie Mae and Freddie Mac also said today they would extend a previously announced suspension of evictions through the end of February. Fannie and Freddie combined own or guarantee about half of the $10.6 trillion in outstanding U.S. home loan debt.
It will be interesting to see how this plays out and how quickly. I'd love to hear from anyone who ends up renting back their former residence.
-- Lauren Beale
Labels: From owner to renter, in the same house
posted by We buy houses, Stop foreclosure
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Saturday, January 17, 2009
Surveys released today showed that fewer Americans applied for mortgages last week and more were missing payments on their home equity lines of credit. The Mortgage Bankers Assn. said applications for new home loans fell 8.2% for the week ending last Friday, with a slight increase in interest rates for 30-year fixed mortgages reining in the breakneck refinance market. The refinance share of mortgage activity dropped from 82.9% to 79.8% of total applications, according to the MBA report this morning.
The average contract interest rate for 30-year fixed-rate mortgages increased to 5.07% from 5.03% percent, with points decreasing to 1.16 from 1.24 (including the origination fee) for 80% loan-to-value (LTV) ratio loans.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.67% from 4.79% percent, with points decreasing to 1.16 from 1.26 (including the origination fee) for 80% LTV loans.
The average contract interest rate for one-year ARMs decreased to 5.90% from 6.15%, with points decreasing to 0.31 from 0.44 (including the origination fee) for 80% LTV loans.
Also this morning, the American Bankers Assn. said record numbers of borrowers had missed payments on home equity lines of credit during the third quarter.
The trade group's latest report on late payments for consumer loans said delinquencies on car loans that banks made indirectly through auto dealers also were at the highest levels it had ever recorded.
By contrast, consumers were missing fewer payments on credit cards, the ABA said. A quote from the trade group's economist James Chesen:
While some people are relying on credit cards to meet daily expenses like food and gas, many are being careful not to add new debt.
-- E. Scott Reckard
Labels: home-equity credit delinquencies up, Mortgage applications down
posted by We buy houses, Stop foreclosure
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