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MBA Opposed Obamas Reduction in Mortgage Interest Deductions

February 3rd, 2010

The Obama Administration released the Fiscal Year 2011 Budget.  Needless to say this budget will deeply effect many industries negatively, but specifically in this article the mortgage housing industry. Under the government finance programs like FHA mortgages, borrowers are able to get access to affordable financing with a minimal down-payment and no penalty for earl pay-off.

How can Obama really think that eliminating the mortgage interest write-offs for higher income homeowners will be good for the real estate market and the economy?

Adam Quinones wrote a good article about how Obama’s new budget would be a disaster for housing sector and mortgage industry in general.  He scanned the budget proposal for terms like mortgage, mortgage loan security, housing, community, GSE, government sponsored enterprise, Fannie Mae, Freddie Mac, etc, etc.

HERE is the message from the President. Its five pages long and basically re-iterates the above statement. This is how he ends his message: “These have been tough times, and there will be difficult months ahead. But the storms of the past are receding; the skies are brightening; and the horizon is beckoning once more “HUD SAYS: “HUD’s budget proposal seeks to make targeted investments in people and places – instead of policies and programs –to effectively support HUD’s mission while being accountable to the American taxpayer. $6.9 billion in projected FHA and Ginnie Mae receipts contribute to the FY 2011 proposed $48.5 billion budget total and to the administration’s deficit reduction plans. Net of the $6.9 billion in projected FHA and Ginnie Mae receipts the Budget proposes overall funding of $41.6 billion, 5% below fiscal year 2010, and makes difficult decisions to cut funding for a number of programs.”

The carefully targeted investments in the Budget will enable HUD programs to: House over 2.3 million families in public and assisted housing (over 58% elderly or disabled); Provide voucher assistance to 78,000 additional families (over 47% elderly or disabled);  Assist nearly 5.5 million households, over 200,000 more than at the end of fiscal year 2009.  More than double the annual rate at which HUD assistance creates new permanent supportive housing for the homeless; Create and retain over 112,000 jobs through the Department’s housing and economic development investments in communities across the country.

THE MORTGAGE BANKERS ASSOCIATION SAYS:

The Mortgage Bankers Association (MBA) issued the following reactions and analysis to the fiscal year 2011 federal budget, as proposed today by the Obama Administration.  “Reducing the federal deficit is vital to the long-term health of the US economy and our industry.  However, we believe it can and should be done without negatively impacting the already-fragile housing market,” said Robert E. Story, Jr., CMB, MBA’s Chairman.  “Limiting the mortgage interest deduction and imposing additional taxes on lenders will only make economic recovery more difficult.”

MBA opposes the proposal to reduce itemized deductions, including the deduction of mortgage interest, for taxpayers reporting income above $250,000 (joint) $200,000 (single).  This would have a negative impact on the housing market, particularly in high cost states like California and New York, as it would increase the cost of mortgages for many potential homeowners, especially those in high-cost states.    MBA also opposes the proposal to tax carried interest at ordinary tax rates (as opposed to the capital gains rate, as it is taxed now), as it would discourage capital formation for lending.

MBA believes the Financial Crisis Responsibility Fee will reduce the availability and increase the costs of real estate loans to consumers and small businesses by discouraging large financial institutions from entering into new, private label commercial mortgage backed securities (CMBS) and residential mortgage backed securities (RMBS) transactions and significantly reducing the profitability of non-agency servicing.

Story also noted that the budget did not offer any indications of the Administration’s plans for the future of Fannie Mae and Freddie Mac.”MBA has been at the forefront of the debate over the future of the government’s role in the second mortgage market,” said Story.  “We rolled out our proposal in September and have been meeting with all stakeholders on Capitol Hill, within the administration, and across the industry to share our perspectives.  Our proposal would provide a new foundation for supporting the core of the mortgage market.  We look forward to continuing our discussions as the administration readies its suggestions.”

MBA has supported the administration’s efforts to improve risk management of the Federal Housing Administration’s (FHA), and thus strongly supports the additional $18 million budgeted to allow FHA loans to implement its improved risk management systems.  MBA also supports the $20 million budgeted to combat predatory lending and mortgage fraud at HUD, as well as additional funding for housing counseling and foreclosure avoidance.”We are pleased to see increased funding for several critical programs at FHA,” added Story.  “We support both the efforts to help FHA better manage its risk.  We also support additional funding at HUD and the Department of Justice to combat mortgage fraud.  I also want to add how pleased I am to see that FHA’s multifamily programs are continuing to show strong performance in the face of the current challenges in the housing market.”

MBA also found troublesome the following additional provisions in the budget proposal: Termination of program authority to allow expensing (for tax purposes) of real estate environmental remediation, or “brownfields” clean up costs.  Reduced federal support for terrorism risk insurance program.  Read the original article online.

Foreclosure News, Home Financing, Housing Articles, Loss Mitigation Articles, Mortgage Industry, Mortgage News, Subprime Mortgage News

Averting the Mortgage Crisis

January 19th, 2010

Millions of homeowners are seeking mortgage refinancing or loan modifications in an effort to save their house or make their monthly payments more affordable. Unfortunately for mortgage brokers and lenders, mortgage refinance closings have slowed to very uncomfortable rate.  According to CFB Branch loan manager, Jeff Moran, most home refinance loan programs insured by the FHA are taking seven to eight weeks. Imagine owning a home loan company that had to cover four or five staff payrolls to fund a loan. Imagine paying underwriters, processors and loan officers to work on home loans that likely would not actually close. The mortgage business has seen brighter days. The credit crunch has caused lending guidelines to get tighter to the point that very few borrowers qualify for a home loan. Moran continued, “FHA loans have been the only lending product we can count on and fortunately the government loans will consider the borrower’s compensating factors for approvals.”

On the other hand loss mitigation companies have never has more business. With millions of have homeowners on the brink of foreclosure, people are lining up to help people modify their loan terms. With the recent $850 billion dollars from the Financial Bail-Out package, you can bet that loan modifications will only increase in 2009. Once we get past the foreclosure crisis most financial critics agree that home refinancing will resume back on its normal course.

About the Author: In addition to being the founder of Lead Planet and Nationwide Marketing, Bryan Dornan is a respected copywriter and lending executive who has published real estate articles online. Mr. Dornan suggests visiting the following web-pages: Search Marketing Company and for quality Mortgage Leads visit the Lead Planet online. Bryan Dornan is an experienced real estate consultant who publishes many interesting foreclosure prevention articles for many real estate blogs.  Article Source: http://EzineArticles.com/?expert=Bryan_Dornan

Foreclosure News, Loan Modification News, Loss Mitigation Articles, Mortgage Industry, Mortgage News ,

Southern California Home Sales Up but Home Foreclosures Remain a Problem

October 13th, 2009

Southern California home sales rose higher last month, bolstered by late-closing summer transactions, low mortgage rates and buyers hoping to take advantage of a soon-to-expire tax credit. The region’s median sale price remained lower than in September 2008 but, for the first time in years, several counties logged year-over-year gains in the median price paid for resale houses, a real estate information service reported. Last month 21,539 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. Getting a house loan with bad credit is often more difficult then getting approved for a note modification.

According to DataQuick, that was up 0.2% from 21,502 in August and up 5.1% from 20,497 a year earlier, September marked the 15th month in a row with a year-over-year sales gain, although last month’s was the smallest of those increases. Sales for the month of September have averaged 24,873, ranging from a low of 12,455 in September 2007 to a high of 37,771 in 2003, based on DataQuick’s statistics, which go back to 1988. Home foreclosures and loan modification plans dominated the housing transactions again this quarter even though REO sales were higher.

Foreclosure News, Housing Articles, Mortgage News, Subprime Mortgage News

Saving Your Home with a Loan Modification

August 28th, 2009

Home foreclosure rates and loan delinquencies continues to break records each quarter in the United States. The housing recession and home equity slide has not hit the bottom yet in many regions of the country. Mortgage relief is available to most struggling borrowers, so if you were turned down recently for mortgage refinancing from your lender, it does not mean you won’t be approved for a loan modification plan.

Getting a loan modification is something that many Americans are looking to do to help save their home and avoid foreclosure. Over the last few years, many homeowners have seen their income decline which has made making a home loan payment very difficult. Unfortunately, some homeowners have even given up and just walked away from their mortgage letting their home go into foreclosure.

If you decide to let your home go into foreclosure, it will take you many years to recover financially. You will be able to buy nothing on credit for an entire decade which is a lot longer than it seems. Once you do get this taken off your financial history, it is still going to be very difficult to get a low interest rate on most loans that you apply for. We suggest exploring all options available to avoid foreclosure. In most cases, it would be more advantageous to default on all your unsecured loans and credit cards than to go into default on your home mortgage which ends in foreclosure and loss of your home.

Foreclosure News, Housing Articles, Mortgage News

HUD Suspends FHA Lenders

August 28th, 2009

Three FHA approved lenders approved to offer FHA mortgages insured by the Federal Housing Administration were suspended by the U.S. Department of Housing and Urban Development over “serious” violations. HUD announced their Mortgagee Review Board had suspended Golden First Mortgage Corp. The Great Neck, N.Y., company allegedly neglected to notify HUD of an Office of Thrift Supervision investigation into the activities of its president or his involvement in an OTS civil money penalty. Suspended lenders are not allowed to sell new FHA-insured loans while HUD investigates their FHA lending practices, the statement said.

FHA mortgage rates remain low and the Federal Reserve has ensured FHA lenders and banks offering HUD loans his commitment to making affordable home financing available to Americans. When shopping for a FHA lender, Lenders Nationwide recommends that consumers consider FHA mortgage companies that have a clean HUD record. Read the original Lenders Nationwide article online> 3 FHA Lenders Suspended

Mortgage News, Subprime Mortgage News

Housing Crisis Disappearing

April 6th, 2009

Home Sales in February are beginning to increase with foreclosure defaults supplying much of the housing inventory.  With mortgage interest rates below 5% on thirty-year fixed rate home loans have caused a spike in FHA mortgage lending and home buying for first time homebuyers.

 

Watch Housing Crisis Rebound Video

 

Despite an ongoing recession, dropping home sales and a foreclosure crisis, there are some indications that the housing market may be heading for a recovery. CBS News’ Priya David reports on some positive movement in Portland, Oregon that may reveal signs that the housing crisis could be disappearing.  Some realtors and lenders believe that we are seeing the bottom of the housing slump and that the real estate market in many areas around the country will see a rebound later this year and in 2010.

Foreclosure News, Housing Articles, Mortgage News, Washington News , , , ,

Home Foreclosure Crisis Continues

March 12th, 2009

More home financing debates have emerged as to whether President Obama’s mortgage relief plan will to stop the millions of homes now in danger of foreclosure in the near future. Consider the many underwater refinance mortgage programs over the last few years like, the FHASecure, Hope for Homeowners and the Home Affordable Refinance. For the most part each one of these programs has stopped short of solving the mortgage crisis. Most of the lenders in the country were simply not able to carry the risk that our government was because of increasing loan defaults nationally. Anthony Mason reports on whom Obama’s housing plan will risk the mortgage banking system.

Foreclosure News, Housing Articles, Mortgage News

Countrywide Mortgage and Subprime Loans

January 16th, 2009

Not too long ago, Countrywide was being investigated for mortgage security fraud.

The New York Times, which also cited anonymous sources, said the Justice Department is also involved in the Countrywide investigation. “We are not aware of any such investigation,” Countrywide spokeswoman Susan Martin told the Times.  BofA and Countrywide have been very aggressive with loan modification plans, so it looks like in the end Countrywide is trying to get it right. In recent years, bank and lenders are less likely to offer subprime home loans to a borrower that is struggling with affordability.

The Wall Street Journal first reported that the mortgage superpower was the subject of an inquiry, citing law enforcement officials and finance executives with knowledge of the development. FBI spokesman Special Agent Richard Kolko would not confirm if Countrywide is under investigation but said there is an open investigation. “The FBI has been investigating potential fraud in the subprime lending industry, however, we cannot confirm or deny which companies are under investigation, “Kolko said.

Foreclosure News, Housing Articles, Mortgage News , ,

Hank Paulson The Worst is Just Beginning for Housing Markets

January 16th, 2009

A year ago, Treasury Secretary Henry Paulson predicted the fallout from the subprime mortgage crisis was “largely contained.” The reports indicate that housing markets across the nation continue to decline.

Most homeowners and people residing in the United States, would disagree with Treasury Secretary Paulson. The foreclosure rates rose 81% in 2008 and so far in 2009 the foreclosure crisis looks to be a major issue facing President Barrack Obamma.

Foreclosure News, Housing Articles, Mortgage News, Washington News , ,

Does Bush Hold Responsibility For the Housing & Mortgage Crisis?

January 12th, 2009

Jon Kyl and Chris Dodd talking about the mortgage crisis that evolved into a housing crisis.

Blitzer opens with: A lot of people, Senator Kyl in Arizona, in the housing market out there, they’re suffering big-time right now. How much of the blame, and I know you’re a blunt guy, how much of the blame does the Bush administration deserve for allowing this kind of situation to deteriorate, as it has? Does George Bush Have Any Responsibility For this Mortgage Crisis.

KYL: Virtually none.

BLITZER: Why?

KYL: We’ve been predicting for years that this problem would come along. When I was chairman of the Republican Policy Committee, we wrote papers on it. We provide people with the tools to compare mortgage refinance loans and it is not the Federal government’s job to micro-manage banks.

BLITZER: But isn’t the federal government responsible for making sure this kind of situation doesn’t happen?

KYL: The problem is, there is very little regulatory authority. That’s why this legislation that Senator Dodd has been working on, the one good feature of it is additional regulation. But we should have had that regulation four years ago. The other problem, here, is that much of the bailout here is for the people holding bad loans, not the homeowners. It’s for the speculators, the investors. I know in the oil crisis, everybody’s concerned about the speculators driving up the price. What do you think happened in the housing market?

BLITZER: Senator Dodd, go ahead and respond.

DODD: No, no, no. Very specifically, Jon, we absolutely seclude speculators from having any benefit all the under the act. That’s very clear in the law. Of course, this is a highly regulated industry, Jon. This isn’t like hedge funds. The mortgage market has been a highly regulated industry. Where were the cops? Why weren’t they out there saying when brokers were luring people in and saying I’m your financial adviser, a fully indexed price, don’t worry about it, lie about it if you want, we’ll get you into that home.

Those were people that had a responsibility, that failed in that responsibility, and the regulators watching them should have been doing a better job and they didn’t do it. That’s a major reason why we’re seeing the problems we’re seeing today.

KYL: Just one quick example. There’s much to be said. The provision that Chris alluded to that the Bush administration opposes and would veto the legislation over are these CDBG grants. They don’t help. Get the latest News on the Housing Crisis.

Foreclosure News, Housing Articles, Mortgage News