Freddie Mac Hikes Fees on Higher Risk Loans; DU 8.2 Update Coming Soon; Fraud in the Mortgage Business; Free Refi Offer from Chase

Fraud continues to be an issue, both currently and in the past.  For example, in Citi's latest bulletin, "Correspondents must have policies and procedures in place for fraud detection, prevention, training and reporting that comply with Fannie Mae, Freddie Mac, and CitiMortgage requirements for each stage of loan origination and servicing process, including employee screening, hiring and training, quality control and reporting. Lender employees must receive fraud training updates at least once a year."

Yesterday we learned that a Kansas City-area mortgage loan officer and an area real estate agent were among nine people indicted in an $11 million mortgage fraud scheme that involved a network of fictitious businesses and straw buyers. Back in 2005 and resulted in $11.1 million in bad loans on 16 residential properties in several Missouri communities. The sale prices for the properties were illegally inflated, and more than $2 million was paid to buyers solicited to help in the conspiracy, as fraudulent mortgage applications were submitted and buyers created fictitious businesses that issued false invoices that claimed the businesses had provided work and services for which they were entitled to receive loan proceeds.

Oregon's attorney general believes American Team Mortgage, out of California, improperly charged 32 homeowners $80,000 for loan modification application fees. The lawsuit was filed in Oregon, and alleges that most of those fees were charged in advance of providing services to clients in violation of Oregon law. The company may have only actually obtained loan modifications for two Oregon clients, and went out of business 5 months ago.

On the good news side of things, Redwood Trust "is working on a second securitization that it expects to complete in the first quarter of next year. By the end of October, the company had purchased $160 million of residential mortgage loans and had made commitments to purchase an additional $138 million. FULL STORY

Freddie Mac told its customers of a higher fee structure that is set to begin in March. Freddie will be "increasing the Indicator Score/LTV delivery fee rates for mortgages with certain Indicator Score/LTV ratio combinations" and "revising the secondary financing delivery fee rates therefore increasing delivery fee rates for mortgages with certain LTV/total loan-to-value (TLTV) ratios and Indicator Score combinations and adding a new secondary financing delivery fee for these mortgages with second liens and LTV ratios less than or equal to 65% and TLTV ratios greater than 80% and less than or equal to 95% in the Mortgages With Secondary Financing fee rate table." The fee increases, aimed at higher risk loans, will raise some of the upfront fees by as much 0.75 percent of loan balances, and lenders are seen offsetting an upfront fee of 0.25 percent by raising the rate on a 30-year loan by 0.05 percentage point, causing a rise of about $10 in the monthly payments on a $200,000 loan. Investors believe that this should slow prepayment speeds on higher LTV/lower FICO loans. (So far Fannie has not had similar increases...so far.).

Freddie also came out with new pooling options for fixed-rate super conforming mortgages, along with streamlining the process for correcting data for mortgages delivered under a Best Efforts contract and reminding Sellers about our requirements for proper note endorsements. Currently, the association that regulates the bond market has a 10% cap on "jumbo conforming" loans that can be put into a security. Freddie is now providing sellers the option "to form non-TBA Gold and Giant Participation Certificate (PC) pools that comprise up to and including 100 percent of 15-, 20- and 30-year fixed-rate super conforming mortgages under our Guarantor and MultiLender Swap executions. While we are providing new pooling options for fixed-rate super conforming mortgages, Sellers can still deliver super conforming mortgages into TBA pools, as long as the aggregate unpaid principal balance (UPB) of the super conforming mortgages does not exceed 10 percent of the total UPB of the PC pool."

Don't look now, but December 11 is right around the corner. Fannie Mae has issued Frequently Asked Questions (FAQs) related to DO and DU Version 8.2, which will be released December 11. "The updates in the release of DU Version 8.2 will support policy changes regarding foreclosures and pre-foreclosure sales; simplified high-LTV transactions and the removal of the "Flexible mortgage" label; rounding of the LTV/CLTV/HCLTV ratio; Community Seconds loan eligibility; inclusion of all revolving debts in the debt-to-income ratio; updated unit number requirements; updated minimum borrower contribution requirements; and other message updates." SELLER GUIDE UPDATE

The new DO/DU version will enforce underwriting changes that will allow buyers to use gifts and grants from nonprofit groups for their minimum 5% down payment. Currently, borrowers had to contribute a minimum 5% down payment from their own funds, but additional down payment money could be from a gift (though never from a home seller). The exception was for borrowers who put 20% down: all that money could come as a gift. But with overlays, many lenders now require a down payment of 10% or more, the new rules mean that borrowers will still have to come up with extra funds - either their own or gifts. But with Version 8.2 comes tougher DTI ratios: the maximum ratio for those seeking a conventional mortgage will drop to 45 percent from 55 percent under the new guidelines. Buyers who have missed a payment will have 5% of the total balance added to their ratios. And borrowers who have gone through foreclosure will be excluded from obtaining a Fannie-backed loan for seven years, up from four.

Yesterday I wrote about how HAMP is going. I was reminded that, "HAMP is actually 'Home Affordable Modification Program' and is part of the MHAP - 'Making Home Affordable Program' initiative by the government. MHAP also includes HARP - 'Home Affordable Refinance Program'. Said another way, "HAMP stands for Home Affordable Modification Program, HARP stands for Home Affordable Refinance Program.  Both of these are part of the MHA program." Thank you.

Berkadia Commercial Mortgage LLC, sprang forth from Capmark Financial and is the servicer backed by Berkshire Hathaway, Warren Buffet's company. Berkadia announced plans to use its own capital to fund a least $200 million in fixed-rate loans to be securitized and sold to investors. "The program, which will focus on mortgages of $5 million to $25 million,will help Berkadia win business from brokers that don't issue loans with their own capital." "It's going to make us much more competitive with other mortgage bankers." Berkadia earns income by servicing $215 billion in mortgages, and will be targeting loans on offices, retail buildings, warehouses and apartments.

There are signs of industry titans attempting to increase market share. Chase is mailing a flyer to existing borrowers for a free refinance: no appraisal, no income statements, no fees, and titling the offer the "Chase Rate Reduction Program."

Wells Fargo appears to have eliminated its processing time issues.

Pricing engines such as Optimal Blue have set up Bank of America's 30-yr Fixed Rural Housing Direct Leverage product, although GMAC has discontinued its Conforming 7/1 LIBOR ARM 40 Yr.

Union Bank cleared up a question on its Tenants-in-Common Vesting on 2-4 unit properties: "effective immediately, on refinance transactions, all current vested owners and borrowers must remain the same, with no additional new borrowers added." Fannie Mae seller/servicers learned that Fannie Mae will continue accepting hazard insurance coverage from State Farm Florida Insurance Company, despite its rating being downgraded by A.M. Best, on properties securing certain Fannie Mae mortgage loans in Florida.

There is no argument that most of the recent data on the economy has been better than forecasts. The question comes up, of course, were our expectations too low, or is the economy really starting to improve? Yesterday we had no substantive news, but like a spring that was stretched too far last week, bonds continued to spring back toward lower rates. Last week, and the week before, mortgage rates begin to move higher for a variety of reasons: stronger than expected economic data signaled growth which for some reason always makes some folks fear inflation, and substantial opposition to the quantitative easing program from other countries and from many US politicians and economists. The $35 billion 2-yr auction was decent, and the 10-yr note was up better than .5 in price to yield 2.81%. In mortgage-land, traders reported seeing less than half the normal volume, and MBS prices finished the day better/up by about .250 in price.

The Transportation Security Administration recently implemented new search routines at airports. There is growing public controversy over pat downs and full body scans at airports, The TSA Administrator stated that "there is a continual process of refinement and adjustment to ensure that best practices are followed."

To go along with this change in policy, a series of TSA airport signs are about to be released, with catchy slogans:

"Can't see London, can't see France - unless we see your underpants."

"Grope discounts available."

"If we did our job any better, we'd have to buy you dinner first."

"Don't worry - my hands are still warm from the last guy."

"Wanna fly? Drop your fly!"

"We are now free to move about your pants."

"We rub you the wrong way, so that you can be on your way."

"It's not a grope, it's a freedom pat."

"We handle more packages than the UPS."

Lending Probe May Lift Borrowing Costs as Record Year Sours: India Credit

India’s real-estate developers may face rising borrowing costs and shrinking access to credit, as record corporate lending slows amid a bribery probe that led to the arrests of eight executives.

The combination of the regulatory review and tighter central bank provisioning rules may cause rates on loans for developers to rise as much as 200 basis points, or 2 percentage points, by March, according to Kotak Securities Ltd. and Ambit Capital Pvt. Syndicated loans to companies fell to 140 billion rupees ($3 billion) in November, down from 199 billion rupees in October, and compared with 2.75 trillion rupees this year, the most since Bloomberg started compiling the data in 2002.

“The biggest casualty will be real estate companies,” said Shashank Khade, who manages funds for wealthy clients at Kotak Securities in Mumbai. “The lenient, benign environment for fund raising will end and life will become difficult as the cost of funds will increase.”

Property companies in emerging markets are facing rising loan costs as central banks tighten policy to guard against concerns that monetary expansion by central banks in Europe and the U.S. will fuel asset bubbles. Indian developers that had managed to repair balance sheets after the global credit crisis, may face delayed loan approvals, CLSA Asia-Pacific Ltd. and HSBC Holdings Plc wrote in notes to clients last week.

The average cost of debt at New Delhi-based DLF Ltd., India’s biggest developer, had fallen to about 10.5 percent from a peak of 12.6 percent during the crisis, Saurabh Chawla, executive director for finance, said in an interview in September. The company, whose average tenure of loans is almost four years, is the only developer that has sold corporate debt.

Federal Probe

DLF sold 7 billion rupees of 10.5 percent bonds maturing in 2013 in February, down from the 13.7 percent rate it paid to sell five-year bonds in August 2008. There are no prices available for the debt, which is unrated, according to data compiled by Bloomberg. DLF’s funding cost is higher than the 11.09 percent average for five-year BBB-rated Indian companies. The differencein yield between BBB bonds and similar-maturity government bonds is 321 basis points, near a two-year low.

The Central Bureau of Investigation is probing whether preferential treatment was given to developers including DB Realty Ltd. and Lavasa Corp. LIC Housing Finance Ltd., the property financing arm of India’s largest insurer, is at the centre of the investigation. Its Chief Executive Officer Ramachandran R. Nair and officials at the Life Insurance Corp. of India, Bank of India, Central Bank of India and Punjab National Bank were arrested on Nov. 24.

Government Bonds

Indian property stocks dropped last week to their lowest in more than a year, with the Bombay Stock Exchange’s 13-stock realty index dropping 26 percent in 2010.

Investors favored government fixed-income assets, driving the yield on the 10-year government bond down eight basis points this month to 8.04 percent. It rose three basis points today.

India’s bonds returned 0.7 percent this month, indexes compiled by HSBC Holdings Plc show, on slowing inflation and optimism economic growth exceeding 8 percent will help the government slash its budget deficit. The advance was the best performance among 10 Asian local-currency debt markets outside Japan tracked by Europe’s largest bank.

GDP Report

The government said today that gross domestic product rose 8.9 percent in the three months ended September, above the 8.2 percent median forecast of 30 economists in a Bloomberg survey. Wholesale-price inflation slowed to 8.58 percent in October from this year’s high of 11 percent in April.

China raised interest rates for the first time in three years in October and suspended mortgages for third-home purchases to cool property prices. Russia is facing a risk of “explosive” increases in real-estate prices, Prime Minister Vladimir Putin said in August.

Borrowing costs for Chinese developers have risen this month, becoming the worst-performing dollar debt in Asia. The yield on Guangzhou-based Evergrande Real Estate Group Ltd.’s 13 percent notes due 2015 rose 105 basis points to 11.90 percent this month, according to Royal Bank of Scotland Group Plc.

Worst Performer

The rupee is the worst performer this month in Asia excluding Japan, with a 3.4 percent decline to 46.05 per dollar. It fell 0.2 percent today. The cost of protecting the debt of government-owned State Bank of India, which some investors perceive as a proxy for the nation, rose 11 basis points to 174 this month, according to CMA prices.

The gap between India’s benchmark 10-year notes and similar-maturity securities in the U.S. shrank to 518 basis points today from 551 at the start of the month. The difference is up from 375 at the end of last year.

India’s Finance Minister Pranab Mukherjee asked state-run banks to review their loans to companies named by federal investigators. Last month, the central bank increased risk weightings for retail housing loans above 7.5 million rupees in its policy announcement.

Bank financing will now be subjected to more screening and approvals, forcing developers to rely on cash flows and sales of property to service debt, said Parikshit Kandpal, an analyst at Mumbai-based Ambit Capital. He expects short-term borrowing costs for the industry to climb between 100 basis points and 200 basis points.

“The ease with which developers can access and refinance existing loans will come into question,” said Krishnamurthy Harihar, Mumbai-based treasurer at the Indian unit of Johannesburg-based FirstRand Ltd. “Rates would also have gone up after the risk weighting was increased by the Reserve Bank.”

To contact the reporters on this story: Pooja Thakur in Mumbai at pthakur@bloomberg.net;Anurag Joshi in Mumbai ajoshi53@bloomberg.net

To contact the editors responsible for this story: Andreea Papuc at apapuc1@bloomberg.net; Sandy Hendry at shendry@bloomberg.net

Get The Best Range Of Resources For You Home Mortgage Refinance Loan

President Obama’s Home Affordable Program is intended for helping millions of Americans protect their homes through help to either mortgage refinancing or loan modifying their present mortgages into reasonable payments. Which one is right for you? The Home Affordable Program has number of components, and based on your condition, you can be eligible for assistance using one of the federally subsidized alternatives.

The Home loan Modification program is intended for borrowers facing a financial hardship and not able to get benefit of the existing low rate of interest because of loss of equity or low credit ratings. Under this program, contributing lenders would be paid to modify loans for competent homeowners. The terms provided include interest rates lowered to 2%, loan terms extended to 40 years and principal delay. If you have lost important equity because of reduced home prices and aren’t able to refinance or sell your home, you could be qualified under this part of the program.

The Home mortgage Refinance loan is intended to provide a new loan at existing market rates for homeowners who are present on their mortgages, however who don’t gets eligible for a standard refinance because of loss of equity. In case your mortgage balance is 105% of the present value or less and you haven’t been more than 60 days delayed in the last 12 months, and your present loan is owned or provided by Fannie or Freddie you can be eligible under this program.

How to Get Started with Bad Credit Mortgage Refinance Loans

A lot of people out there would like to purchase a home outright, but they are convinced to think that their bad credit history is going to make them ineligible for a bad credit mortgage refinance. Fortunately, since a mortgage is simply a secured loan (which means that the bank can simply foreclose on your home if you just stop paying your bills each month on the loan), most people with bad credit are still able to qualify for a mortgage refinance. Unfortunately though, having that negative credit history likely means that you will probably end up having to pay more in terms of interest rates & fees on your mortgage refinance than someone with a good credit history would have to. However, there are still some steps someone with bad credit can take to qualify for the best possible mortgage refinance terms possible.

A bad credit home refinance is not the same as a simple sub-prime lending. Instead these financial lenders will actually help people with bad credit or low incomes obtain a bad credit mortgage refinancing loan. They can also help borrowers refinance their current mortgage at much lower interest rates.

With the ongoing credit crisis that just about everyone out there is experiencing, few mortgage financial lenders are approving home refinance for bad credit borrowers. Many of these people want to get themselves a more favorable interest rate on their house, but are unfortunately unable to because they cannot get the financing that they require through traditional financial lenders.

See If You Are Eligeble For Bad Credit Mortgage Refinance Loans !!

Bad credit mortgage refinancing companies actually will require borrowers to provide enough sufficient evidence that they can repay the payments on time each month. They will typically charge higher interest rates and closing costs than banks on their mortgage refinance with bad credit. On a positive note though, these interest rates are currently the lowest that they have been in decades. Paying higher interest rates on a bad credit home refinance can still end up providing you a reasonable monthly payment.

Individuals who are currently facing a threat foreclosure might be able to obtain some much needed financial relief through a refinance home loan with bad credit through their financial lenders. If you are capable of finding a financial lender that is willing to provide a home refinance for bad credit, then you could end up stopping a foreclosure and perhaps even reduce monthly payments on your loan to make things easier to manage.

Regardless of your reason for needing a lender that specializes in home refinance for bad credit, it’s always smart for you to engage in some sort of due diligence and find out everything you possibly can on the company before signing anything with them. If you do plan to get a bad credit mortgage refinancing, you should plan to spend nearly as much time researching financial lenders as you can. Otherwise, you very well could end up becoming the victim when all is said and done.

Ways to Get Money Fast

If you are like many Americans, you’re living paycheck to paycheck, and the odds are 1 in 50 that you are currently late on your home loan payment or in the process of foreclosure; with this type of financial strain it can take only one small emergency to throw your financial equilibrium out of balance and leave you in a situation where you need cash fast. Regardless of how good your reason is for needing money quickly, be it a sudden illness or you accidentally spent too much buying holiday presents, you need money and you need it fast.

While there are several options you have for accessing cash quickly, they fall into five basic categories. Spend some time reviewing each of the following to make sure that you are accessing the cash you need in the best way for you:

1. REFINANCE: If you own your home, consider refinancing as your first and best option. Refinancing your home can help you get thousands of dollars, even allowing you to take out enough to develop a cushion in your banking account, and, depending on the interest rate you receive when you refinance and the term of your loan, you may be able to avoid an increase in your monthly payment. Of course, when you refinance, you placed your home at risk so only pursue this option if you are certain that your financial emergency is truly a temporary one and one that you are willing to take steps to avoid in the future.

2. SELL: Alternatively, especially if you only need a relatively small sum, you may want to gather some of your smaller assets and sell them, such as through eBay, upon shop, a consignment store, or by placing an ad in your local newspaper or craigslist. On the plus side, you can get rid of clutter in this way and you will not have to pay any interest. However, when you sell in this way, there’s no guarantee that you will get fair market value for your goods; in fact, it is far more likely that you will receive less than market value, not to mention the amount of time you spend in selling in this way.

3. RETIREMENT: If you do not have a home on which you can borrow or assets to sell, consider borrowing off of your retirement. While this is never really a “smart” idea, if you are in financial troubles, you need longer than 90 days to pay back the money, you have bad credit, and you do not own a home or assets you could borrow against, borrowing off of your retirement may be a good option for you. However, if you do so you will have to pay fines, penalties, interest, and taxes, as well as repaying the amount you borrowed.

4. SECURED PAYDAY LOANS: A secured payday loan is a type of loan that allows you to borrow money from a special payday lender in return for securing that sum with collateral, such as your car title. By providing collateral for your loan, you can typically enjoy a fair interest rate. However, the amount you can borrow will be limited by the value of your collateral, and you typically have less than one month to repay the money.

5. UNSECURED PAYDAY LOANS: An unsecured payday loan is a loan that is provided to you typically without a credit check, without your having to put up collateral, and without checking your income. While this may sound like a deal, and in fairness you can typically receive your money within 24 hours, expect to pay high interest and fees as the lender have to be able to absorb the risk of not doing a credit check and not validating your income.

Credit Loan: Ways to Get Money Fast http://www.creditloan.com/blog/2010/11/30/ways-to-get-money-fast/#ixzz16p8q2WIa 

http://www.creditloan.com/ 

Reduce Your Refinance Cost With The Help Of Home Mortgage Refinance Loans

We have heard a lot about the refinance mortgage industry lately and most of it is negative and less positive. If you are some one who is looking for a mortgage modification then I would suggest you to read my Blog. You may also want to know about the HAMP- Home Affordability Modification Plan by Obama Administration.

If you are seriously interested in modifying your home loan then Obama loan Modification will be the best of all. You should hurry after reading this blog because the administration is trying to keep their rules and policies extremely simple and comfortable. Obama Administration has plans to support all the struggling home owners by the end of his tenure. “Obama administration has committed on helping those who are undergoing financial distress. The US government has allotted $75 million to all those are afraid of possible foreclosures”.

The main Goal of the Obama Administration is to promote a mutual progress and stability to both the home owners and the housing market. To achieve their target they have come with an amazing idea of providing incentives to the agencies that would help the home owners to modify their loans and provide tax credit to the home buyers.

According to FICO, the best credit score is above 720 in the US. Your chances for getting one refinance home mortgage loans increases if you have a good credit score. If you are considering your home for Mortgage Refinance then you are lucky. According to a firm, Zillow a real estate tracker, “In St. Louis, 18 percent of homes were valued less than the mortgage on them”.

People who are in a real bad condition with regards to home loan mortgage should consider refinancing. But their Loans should be the one under the Fannie Mae and Freddie Mac. These refinancing agencies are giving 125 percent of the value of the home.

You should always consider your future plans before you deicide on applying for refinance mortgage loans. If you are planning to move outside of that house someday then chances are it makes no sense in buying a Home loan refinance. Invest only if you are planning to stay for a long time.

How to Refinance a Mortgage?

If you need to negotiate the terms of the present mortgage then do not hesitate in hiring a real estate attorney to help you succeed in negotiation. If your current mortgage is less than 20 years then do not get involved in any Refinance mortgage plan more then 30 years, because this will only increase your long term payments.

Who will qualify?

1. Borrower is delinquent on their mortgage or faces imminent risk of default.
2. Property is occupied as borrower’s primary residence.
3. Mortgage was originated on or before Jan. 1, 2009 and unpaid principal balance must be no greater than $729,750 for one-unit properties.

4 Effective Steps To Find The Best Home Mortgage Refinance Deal!

“Home mortgage refinance loan is the best option to avoid foreclosure, this option allow people to stay in their homes. Few points should be considered for availing the best mortgage refinance like conducting immense research, choosing fixed interest rate plan, enquiring about the hidden cost etc should be done to avail the best mortgage refinance deal”.

When you come across home foreclosure trouble over the failure for the home mortgage loans, the most feasible and effective way to deal with this mess is mortgage refinancing. Its easy to find the refinance packages for your home, but to locate the best deal is not easy unless one understands how and where to seek them. Usloanz is also one great platform for mortgage refinancing in America. It has successfully helped many individuals and its still doing the same.

Before availing refinance home mortgage loan from any firm, one should keep in mind that those lenders who provide lower interest rates are not always the best one, thus one should check the terms and condition of the company before availing its service. So how can you find the best mortgage deal?

Below given are few tips which will help you out for mortgage refinancing:

Conduct immense research and explore around: One could either conduct an online research, ask his friends or relatives which deal with mortgage refinancing firms on how efficient are the companies. But the key is to have as many as available option, the more the option, the more would be the chances of getting the best lowest mortgage refinance.

Choose fixed interest rate plan instead of variable interest rate plan: considering the uncertain economic conditions which people are facing today, its best to play safe and choose fixed interest rate plan which is secure for any bad credit home mortgage refinance.

Always enquire for the hidden costs: One should always inquire about the hidden cost or about the terms and condition when you find the best refinance plan for your mortgage and especially for second mortgage loan. Other things which one should consider are prepayment penalties, balloon payments, late penalty charges etc.

Make use of the helpful sites: One of the best sites for mortgage refinance in America is Usloanz, thus one should check this site and avail their services. One can even choose cash out refinance rate option to save his home from foreclosure.

If one follows the above all tips than he can easily avail mortgage refinancing for bad credit without any problem!