Posts Tagged Financial Services

Utah Mortgage and Real Estate News

Some Mortgage Servicers Are Worse Than Others

The ongoing investigation into mortgage servicers has shown that some of the country’s largest mortgage servicers are worse than others in how they handle home loans.

Loan servicers don’t actually hold the loan, but collect the payments from borrowers and handle the foreclosure process for investors.  Servicing rights are highly sought after for where making a loan is a one time source of income, being paid a percentage of every mortgage payment to service and process those payments is an ongoing and very profitable revenue stream.

Bank of America to Lift Foreclosure Freeze in 23 States

Bank of America has announced that it will resume foreclosure proceedings on 102,000 some-odd home in 23 states this coming Monday.  However government investigators are still moving forward with their investigations into BofA and others to determine if some people were inappropriately foreclosed on.

And in older, yet related news:

Bank of America seizes home, turns-off utilities and takes the parrot of borrower who wasn’t behind on payments

A 47-year old Pennsylvania woman came home to find Bank of America had seized her home, shut-off her utilities and took her pet parrot.  The kicker… She was current on her mortgage.  Bank of America’s records were wrong.  Shed’s some light on why they are being investigated for improper foreclosures, huh?

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FHA set to increase monthly mortgage insurance premiums

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HUD is making some changes to both the upfront mortgage insurance premium (UFMIP) and monthly mortgage insurance premium (MMIP) on FHA loans.

Currently FHA loans have a one-time fee at closing of 2.25% of the loan amount for UFMIP and a monthly rate of 0.55%.  Under the new guidelines the UFMIP will drop from 2.25% to 1.00%, however the MMIP will increase from 0.55% to 0.95% for 20 and 30 year loans of 95.01% loan-to-value (LTV) and greater and .085% for 20 and 30 year loans of 95% LTV and less.

15-year loans with a LTV of 95% or less will not be subject to MMIP and from 95.01% LTV and greater the MMIP will still be 0.25%. There is no change here.

Currently the median price of a home in Salt Lake County is $224,500.  In terms of a FHA loan this equates to an upfront mortgage insurance premium of $5,051.25 and a monthly mortgage insurance premium is $102.90.  The up-front mortgage insurance is rolled into the loan and adds about $24 a month to the principal and interest payment. The changes will drop the UFMIP to $2,245.00 but increase the monthly premium to $177.13 on a loan of 95.01% LTV or greater. Overall an increase of about $60 a month on a $224,500 loan.

What this is going to do is decrease the loan amount buyers will qualify for. The median household income in Salt Lake County as of the last census is $58,000 annually. Currently this would qualify this home buyer(s) for a FHA loan of $244,000.  After October 4, 2010 the same buyer will qualify for a FHA loan of $232,000.

So if you’re looking at doing a streamline refinance on your current FHA loan or want to refinance an ARM or other loan into a fixed-rate FHA, call your loan officer now. If you are looking for a home it would be wise to get pre-approved for FHA loan now. FHA case numbers have must be assigned to new loan files by October 4 to beat the rate increase deadline.

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Real estate “vultures” help troubled homeowners

WSJ - Homeowners find help from unlikely sourcesAnna and Charlie Reynolds of St. George, Utah, were worried about losing their home to foreclosure last year. Then they got a lucky break—from an unlikely savior.

Selene Residential Mortgage Opportunity Fund, an investment fund managed by veteran mortgage-bond trader Lewis Ranieri, acquired the loan at a deep discount and renegotiated the terms with the Reynolds. The balance due was cut to $243,182 from $421,731, and the interest rate was lowered. That reduced the monthly payment to $1,573 from $3,464, allowing the family to stay in their home despite a drop in Mr. Reynolds’ income as a real-estate agent. “It was a miracle,” says Ms. Reynolds.

Story continued here:  ‘Vultures’ Save Troubled Homeowners

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