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Tag Archives: Refinance

States and Servicers Consider New Proposal for Aiding Those Underwater

Help for underwater homeowners has moved from principal writedowns to refinancing in the settlement negotiations between state attorneys general and the nation's five largest mortgage servicers. According to a widely circulated report, the proposal made its way into the talks last week. Borrowers who are current on their mortgage payments but owe more than their home is worth would be able to refinance at today's lower rates. The main caveat is that the loan must be owned, not just serviced, by one of the five banks.

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Major Banks Accused of Defrauding Veterans, Taxpayers

While five major banks continue to deliberate with the state attorneys general for a settlement involving violations in mortgage documentation, the same five banks, plus several others, also face charges for committing fraud against veterans and taxpayers. Defendants accuse 13 banks of ""a brazen scheme to defraud both our nation's veterans and the United States Treasury of millions of dollars"" by overcharging borrowers in connection with home loans refinanced through a U.S. Veterans Affairs program.

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Former Lend America President Pleads Guilty to Mortgage Fraud

After admitting to an extensive mortgage fraud scheme, the former president of Lend America was suspended from doing any future business with HUD. Michael Primeau pled guilty to charges that he ordered employees to pay company operating expenses with funds intended to cover borrowers' first mortgages at refinance closings. Previously an FHA-approved lender, Lend America also allegedly violated FHA's origination and underwriting standards on several occasions, according to HUD.

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Thirty-Year Rate Jumps Back Up Above 4% Mark in One Week’s Time

The run for below-four-percent 30-year mortgage rates was short-lived. After a history-making drop to 3.94 percent last week, Freddie Mac has recorded an 18 basis point jump in the average interest rate on a conventional fixed-rate mortgage with a 30-year term. Mortgage rates across the board rose sharply this week. Freddie Mac attributes the sudden upward movement to last Friday's better-than-expected employment report, but the GSE stressed that even with the increases, mortgage rates remain near their 60-year lows.

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Senators Call for Immediate Action to Help Homeowners Refinance

Market watchers have their eyes peeled for word from Washington that officials will relax the rules of a government refinancing program to allow underwater homeowners with GSE-backed loans to take out new mortgages with lower interest rates. President Obama promised just over a month ago that a new and improved Home Affordable Refinance Program (HARP) would soon be unveiled, but lawmakers are growing impatient. A bipartisan group of senators has sent letters to the heads of four federal agencies calling for ""immediate"" action.

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Congress Scrutinizes Federal Housing Programs

Federal housing programs came under attack during a congressional hearing Thursday titled ""The Obama Administration's Response to the Housing Crisis."" Members of the Senate challenged witnesses with questions about the effectiveness of several programs, including the Neighborhood Stabilization Program and the Home Affordable Modification Program. Industry experts also discussed the potential of new initiatives, such as the REO rental proposal.

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Thirty-Year Mortgage Rate Falls Below 4%

The average rate for the conventional 30-year fixed mortgage has dropped below the 4 percent mark for the first time in history, according to numbers released Thursday by Freddie Mac. The GSE's market analysis also shows that the 15-year fixed rate - which has become a popular refinancing option among existing homeowners - fell to its lowest level on record for the sixth consecutive week. Freddie's national survey puts the average rate for a 30-year mortgage at 3.94 percent and the 15-year rate at 3.26 percent.

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Fed Governor Calls for Revised Incentives for Servicers

The current compensation structure for mortgage servicing needs to be revised so servicers' incentives will align with those of borrowers and investors, stated Federal Reserve Governor Sarah Bloom Raskin in a speech Tuesday. Raskin says it is imperative that servicers have adequate incentives to perform payment processing efficiently on performing mortgages, and to perform effective loss mitigation on delinquent loans. She also believes investors need methods to allow them to monitor servicer performance.

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Moody’s: Refinancing Is Key to Housing Market Recovery

If all of Fannie Mae's and Freddie Mac's borrowers paying interest rates that are higher than the median rate were to refinance at 4 percent, the savings would total $63 billion. While such an option would not bring the total $63 billion in savings to fruition, Moody's chief economist, Mark Zandi, says ""even a fraction would be a big plus."" According to Zandi, the single most effective policy move for the housing market would be to facilitate more mortgage refinancing.

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Fed Uncovers Sharp Drop in Lending in Foreclosure-Ridden Areas

Mortgage lending has declined sharply in neighborhoods with high levels of foreclosures, according to the Federal Reserve. The U.S. central bank looked at what the Neighborhood Stabilization Program (NSP) identified as ""highly distressed"" census tracts. Based on information gathered under the Home Mortgage Disclosure Act (HDMA), the Fed found that home-purchase lending in these highly distressed tracts was 75 percent lower in 2010 than it had been in these same tracts in 2005, and primarily reflects tighter credit for higher-income borrowers.

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