6 Ways the Government Shutdown Affects Home Loans

6 Ways the Government Shutdown Affects Home Loans The last time we went through a government shutdown in 1995, it was a pain, but not a panic. With Monday's news that the government is in the midst of a shutdown, it's important to remember that all mortgages purchased and securitized by Fannie Mae and Freddie Mac will not be affected, since their operations are paid for by the fees charged to lenders and borrowers. Others may not be so lucky. The six points below illustrate how government-affiliated mortgage loans and critical steps throughout the loan process may be impacted: Federal Housing Administration (FHA) Loans: With the shutdown, we may see delays but not a complete stop to FHA loan closings. A report from the Department of Housing and Urban Development has stated that FHA's Office of Single Family Housing will remain open for business, albeit with a smaller staff. The office will continue to endorse loans and it doesn't expect the impact on the housing market to be "significant, as long as the shutdown is brief." Department of Veterans Affairs (VA) Loans: Like the FHA, disruption is possible–but not absolute. The VA will continue to guarantee mortgages for Americans who have served in the military, since these loans are funded by user fees. It warned, however, in its September 25th contingency plan, that Loan Guaranty certificates of eligibility and certificates of reasonable value may be delayed. IRS Tax Transcripts: If a loan requires the verification of at least one previous IRS tax return, this process may be delayed. While prior years' tax transcripts can be ordered online, there is no indication whether an automated fulfillment system will be impacted. Verifications of Employment, for Government Employees: If a federal government employee is seeking a mortgage, and his employment verification is required prior to closing, a lender may be unable to verify this during a shutdown. FEMA Homes: Homes in flood zones would not be able to close, as flood insurance could not be obtained. USDA Loans: During the shutdown, the Department of Agriculture's doors will be shuttered. According to the USDA, no new housing loans or guarantees will be issued through its Rural Development programs. The USDA has also warned that a long shutdown will result in construction setbacks and "a substantial reduction" to available rural housing relative to population.  Stay tuned for updates on this very important time. If you have any questions, please call or email me today. Sincerely, Christian Pak Homeland Financialcpak@homelandmtg.com

NMLS 150504 / 162627 Georgia Residential Mortgage Licensee

Why you should be working with a State Licensed MLO

Did you know that there is a big difference between a licensed mortgage loan originator and a registered loan officer at a bank?   Ask the MLO you would like to see their state license. If they can't provide one, they are most likely a "registered MLO". Do you know the difference? See the chart below. It's very clear which one you should be working with to help you with the biggest purchase of your life. 

You can go to www.nmlsconsumeraccess.org, then enter my license number 162627 to verify my license credential as well as any other MLO's or loan officers.  

Remembering 9-11

Freedom has its life in the hearts, the actions, the spirit of men and so it must be daily earned and refreshed - else like a flower cut from its life-giving roots, it will wither and die. ~Dwight D. Eisenhower

FHA Update: FHA loan after a bankruptcy, foreclosure or short sale.

You now have to wait only one year after a bankruptcy, foreclosure or short sale to qualify for an FHA loan. The period had previously been two years following a bankruptcy, and three years following a foreclosure or short sale. 

To qualify for this exception, borrowers will have to show that they experienced an "economic event" whereby their household income fell by 20% or more for a period of at least six months. They must also demonstrate that they have fully recovered from the event, and agree to complete housing counselling prior to closing. If you can not demonstrate the significant decrease in income which lead to the economic hardship, the normal wait periods apply.

FHA states: "As a result of the recent recession many borrowers who experienced unemployment or other severe reductions in income, were unable to make their monthly mortgage payments, and ultimately lost their homes to a pre-foreclosure sale, deed-in-lieu, or foreclosure. Some borrowers were forced to file for bankruptcy to discharge or restructure their debts. Because of these recent recession-related periods of financial difficulty, borrowers’ credit has been negatively affected. FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage".

Call me for details regarding the full qualification requirements.

The full mortgagee letter is linked here: HUD ML 13-26

We hope that you and your family are enjoying the final days of summer. 

As we head into fall, let us know if there are any questions we can answer for you.

FHA update: New mortgage insurance payment durations

FHA Update:

For loans with FHA case numbers assigned on or after June 3, 2013, FHA will change the duration the annual MIP is collected.

For any mortgages with LTV greater than 90%, FHA will assess the annual MIP until the end of the mortgage term or for the first 30 years of the term, whichever occurs first. 

For all mortgages regardless of their amortization terms, mortgages with LTV less than or equal to 90% LTV, the annual MIP will be assessed until the end f the mortgage term or for the first 11 years of the mortgage term, whichever occurs first.

So in plain English and for majority of FHA borrowers: If you put less than 10% down payment, you will pay the annual MIP for the LIFE OF THE LOAN. If you put 10% or more down payment, you will pay the annual MIP for the first 11 years.

FHA also increased the FHA annual MIP in April 1, 2013.

Link to the full HUD Mortgage Letter 2013-04

Have a Wonderful Memorial Day

Join us this Memorial Day as we take the time to remember the brave men and women who have served and protected our country.

Freddie Mac Announces Immediate Availability of Streamlined Modification for Delinquent Borrowers

MCLEAN, VA--(Marketwired - May 13, 2013) -  Freddie Mac (OTCQB: FMCC) today announced it is making its new Streamlined Modification program immediately available to all eligible borrowers nationwide in order to expedite financial relief for potentially thousands of distressed families. Freddie Mac's Streamlined Modification program had originally been scheduled to start on July 1, 2013.

News Quote"Today, Freddie Mac is giving a green light to its mortgage servicers to speed up financial relief for potentially thousands of families with delinquent mortgages across the nation. Now mortgage servicers can send eligible borrowers their Streamlined Modification trial period terms as soon as they are ready and borrowers can modify their loans by making the three trial period payments on time. No borrower documentation is needed. Freddie Mac is focused on adding momentum to the housing recovery by giving distressed borrowers more options to avoid foreclosure."

Following link directs you to the full announcement: Freddie Mac announcement

Following link directs you to the info site for the streamlined modification program: Freddie Mac Streamlined Modification

I hope you and your family are enjoying a fun and beautiful spring season. Call or email me if you have any questions about ways to make your finances bloom!

Follow Me On:

		Christian Pak Managing Partner Homeland Financial Phone: (404) 939-0502 Fax: (678) 638-1215 License: 162627 cpak@homelandmtg.com www.christianpak.com

March 2013 February 2013 January 2013 December 2012 November 2012 October 2012 September 2012		Housing is Back! But For How Long? It's a fact: The housing sector continues to gain momentum. The National Association of Realtors reported in February that the national median existing single-family home price was $178,900 in the fourth quarter of 2012, up 10 percent from $162,600 in the fourth quarter of 2011. Keep Reading »    Relationship Roundtable 9 Tips for Successful Family Meetings In an age of iPads, smartphones, on-demand everything and constant daily distractions, being able to effectively communicate with your children is more important than ever. Keep Reading »    Chill-Out On Your Diet How to Boost Weight Loss With Cold Showers With worldwide obesity levels growing--and reaching epidemic levels here in the U.S.--fad diets often come and go. Most of these diets are basically the same: they work (or don't) through some combination of calorie restriction and exercise. In other words, reduced intake and increased output. But science has discovered that may not be all there is to it. Keep Reading »    The Freedom of Boundaries Why and How to Draw a Line Around Your Workday By Jason Womack What does the word boundary bring to your mind? We often associate this concept with what we can't do--with limitations--and we fail to realize that boundaries are in fact a powerful tool that helps many things in society work properly. Keep Reading »    Sync Your Smart Phone and Tablet Computer With Your TV Double the fun with new apps and add-ons that let your tablet or smart phone play well with its big HDTV brother. By Jeff Bertolucci, Kiplinger.com Ever catch yourself checking e-mail or browsing the Web while you're watching your favorite show? You're not alone. A recent survey found that 42% of viewers use a smart phone or tablet while watching TV. Keep Reading »    Spring Veggies A Minimalist's Approach to Life By Kirk Leins Spring vegetables are more than just veggies. They represent a true changing of the guard. As the frost of winter turns to springtime dew, the vegetables that begin to arrive are a far cry from what we see during the colder months. Keep Reading »

Georgia Residential Mortgage Licensee NMLS: 150504 : 162627