This Friday, new rules go into effect for mortgage servicers. Here’s what you should know: 1) If a borrower defaults, the servicer must contact them within 36 days. The servicer must contact the borrower after every missed payment thereafter. At least once every six months, the servicer must contact the borrower in writing. 2) By the 45th day after borrower defaults, the servicer must give the borrower a written list of possible loss mitigation options. By the time the servicer sends this notice, a specific person must be assigned to the borrower’s file. 3) In the event a borrower submits a loss mitigation application 45 days or more before the foreclosure date, the bank has only five days in which to respond and notify the borrower if there are any missing documents, or if the application is complete. If there are missing documents, the bank must allow at least 7… read more →
If you are looking to get and FHA-insured loan for a higher-priced purchase in 2014, you may be out of luck. HUD has announced new maximum limits for the 2014 calendar year. The maximum FHA-insured mortgage loan in 2014 will be $625,500. That’s nearly a 15% decrease from the amount currently allowed, $729,750. 650 counties throughout the country will be affected. Standard streamline refinances that meet all of the other requirements will not be affected by this decrease.
Last month, the Consumer Financial Protection Bureau announced a new tool to assist homeowners in anticipation of the new mortgage rules taking effect in January 2014. The purpose of the tool, which can be accessed here, is to connect homeowners with local housing counseling agencies. Effective January 10, 2014, mortgage lenders will be required to give mortgage applicants a list of housing counseling agencies. In case they do not have their own lists available by that time, they can use the tool provided by CFPB. The new online tool will help homeowners and home buyers find the closest HUD-approved counseling agencies. It will also list the languages spoken at each agency, as well as list the specific services available there.
Lenders who are FHA-approved and lend on single-family property now face a new set of reporting requirements. Effective last month, lenders must report “material findings” of suspected fraud or material misrepresentation, discovered through the lender’s quality control process, directly to the Federal Housing Administration. The lender must also disclose what the lender is doing to resolve the issue. Any issues that have already been resolved need not be reported. So, what’s a “material finding”? A material finding is any finding that would have caused the lender to disapprove the loan or not request an FHA endorsement had the lender discovered the material finding before the loan was approved. For example, if the borrower would not have qualified under FHA guidelines but was approved anyway because of the lender’s failure to verify his eligibility, income, employment, credit, or the appraisal of the house, that would constitute a “material finding”. If the home the borrower… read more →
If you are making, or thinking about making, certain large-scale alternative-energy improvements to your home, there’s good news for you. You can get a tax credit for 30% of the cost of these improvements. And you have plenty of time to make the improvements too — all the way through 2016. There is no limit on the tax credit for these improvements, except that they cannot exceed 30% of the cost of labor and installation. To qualify, you must install certain types of equipment, such as solar panels, solar water heaters, wind-energy systems, fuel cells or geothermal heat pumps. More information is available on the IRS’ web site. If you’re not making such large changes to improve your home’s energy efficiency, you may still qualify for certain tax credits for 2013. Click here for more information.
Recently, JP Morgan Chase finally settled a lawsuit alleging that they had sold bonds backed by “toxic” residential mortgages between 2005 and 2008, and misled investors in the process. The settlement amount, $13 billion, includes a $2 billion fine paid to the Department of Justice (“DOJ”). Additionally, a portion of the funds will be used for homeowner relief. Specifically, $500 million are earmarked for loan modifications, and $1.5 billion are meant to be used for principle reductions. $2 billion are set aside to forgive the principal balances on homes that are vacant but are not foreclosed yet, to demolish deserted homes, and to assist low and medium-income borrowers who are trying to finance a purchase. $100 million is coming to Illinois, and other states will divvy up close to $1 billion. The bank has until 2017 to complete the delivery of relief to homeowners and borrowers. Much of the rest… read more →
Every quarter, the National Association of Home Builders, in conjunction with Wells Fargo, calculates the “home affordability index”. The index calculates the median income of families in a given area, and compares it with the median home price in that same area. For example, for the third quarter of 2013, the home affordability increase for the Chicago area calculated a $73,400 median income and a $210,000 median home price. Based on these figures, only approximately 64% of homes sold in the Chicago area were affordable to families earning the median income. Interestingly enough, in the second quarter of 2013, nearly 71% of Chicago area homes were affordable to the median-income buyer. The latest figures represent quite a drop just over the last three months. What’s causing this drop? Well, most probably it’s rising home prices and increased interest rates. Home prices are increasing faster than wages do. Although the winter… read more →
If you have made any energy-efficient home improvements since 2006 and have not claimed a tax credit of $500 or more for them already, you may be eligible for a tax credit of up to $500 for improvements made before the end of 2013. The types of items that qualify are listed below: 1) Up to $300 in materials and labor for some energy-efficient electric water heaters and heat pumps, central a/c units, and biomass stoves. 2) Up to $150 for certain energy-efficient propane, natural gas, or oil furnaces and boilers. 3) Up to 10% of the cost, excluding installation, of some energy-efficient insulation, doors and skylights, and certain metal and asphalt roofs. 4) Up to 10% of the cost up to $200 only, excluding installation, of certain energy-efficient windows. You will need your receipts and also manufacturer documentation, so keep the paperwork for when you file your taxes!
In a case decided just last week on appeal in Illinois, In re Application of the County Treasurer, 2013 IL App (1st) 130103 (November 8, 2013) Cook Co., 5th Division, the potential purchaser of a tax deed lost the property because of a two-day discrepancy in the notice he provided. In August of 2008, the appellant bought delinquent real estate taxes from 2006 for real estate located in Cook County. In December of that same year, the appellant filed a copy of it’s Section 22-5 notice, stating that the property owner had until February 12, 2011 to redeem the taxes. February 12, 2011 happened to be a Saturday. No one attempted to redeem the taxes, and in August of 2011, the appellant petitioned for a tax deed. Even though all parties were served, no one appeared in court. Regardless, in July of 2012, the appellant’s tax deed petition was denied because the final… read more →
Until just recently, if you filed a bankruptcy or lost a home to foreclosure or completed a short sale, the FHA had a fairly lengthy waiting period for you to be eligible for FHA financing for the purchase of another home. If you filed a Chapter 7 bankruptcy, you would have had to wait for two years after it was discharged. If you did a short sale or were foreclosed, you would have to wait three whole years before you could get another FHA loan. Now, however, those rules have changed. Under the new Back to Work – Extenuating Circumstances Program, you only have to wait one year if you qualify. Do you qualify? Here are some of the criteria: 1. You must have had significant (20% or more) reduction in household income for at least six month, resulting from loss of employment or some circumstance beyond your control. This qualifies as an “Economic Event”.… read more →