Jerry Wright MLO 181458

In an effort to fill in some of the gaps exposed in the initial Making Home Affordable (MHA) program, Washington has stepped up its efforts to assist more distressed homeowners. In a press release on April 28th, the U.S. Treasury announced an update to the program designed to assist nearly 50% of those homeowners seeking relief from the MHA program.

With millions of lay-offs recently, optimism about the future is fleeting at best. As many as 6 million families are expected to face foreclosure in coming years. Combined with a loss of or reduction in income, many families also have a second mortgage creating additional pressure on their monthly payment obligations

To minimize these complications, MHA announced plans to assist mortgage servicers with new guidelines to both incentivize participation and to help decrease payments for homeowners. These incentives have also been extended to homeowners enrolled in the program to assist them in making their future payments on time.

The news announcement also addressed the Hope for Homeowners (H4H) program created last year, which has failed miserably. Designed to help millions of distressed homeowners refinance their home by lowering interest rates and reducing their principal balances, the program has provided hope for less than 100 people!

The biggest news here on H4H is that participating servicers will be required to look at H4H in tandem while considering a loan modification. In order to support more investor participation, incentives will be extended to the servicer and the Treasury will purchase special H4H Ginnie Mae IIs wrapped by the GSEs. And while this enhancement could potentially benefit homeowners, it does not look like an opportunity for originators to generate income.

Foreclosures remain a huge influence on the housing market.

According to foreclosure-tracking firm RealtyTrac.com, bank repossessions reached record levels for the second straight month in May, topping 93,000 properties nationwide.

However, two interesting trends emerged in the data:

1. 9 of the top 10 metro areas for foreclosure posted annual activity decreases

2. Each of the top 4 states for Foreclosures per Household posted annual activity decreases

We can infer, therefore, that foreclosure activity may be in permanent decline in the areas hardest hit through 2007, 2008, and 2009. In 2010, the data shows, foreclosures are waning.

This is reason for optimism - especially as FHA delinquencies slow nationwide. As fewer homeowners go delinquent, the pace of foreclosures will slow further and that should help boost home values on every block in the country.

If you've been considering bank-owned homes for your own purchase, give a look at the RealtyTrac foreclosure report. It's provides insight on a state-by-state level, and in the nation's largest metropolitan areas.

Then, to complement your research, talk to your real estate about the foreclosure market and what opportunities may exist. Competition for bank-owned homes can be fierce at times, but there's plenty of "deals" out there.

You just have to know where to look.

Today's newest review by a Congressional Oversight Panel, stated only 168,708 homeowners have been offered a long-term mortgage modification as of February. This is just a tiny portion of the six million individuals with mortgages who are more than 60 days behind on their loans.

These numbers are horrible!

The homeowners who received assistance are LESS THAN 10% of what was initially claimed by the Obama administration. Why is it that Americans seem to consistently receive the short end of the Obama bail out stick?

Obama's foreclosure prevention plan, at best, is likely to assist 1 million troubled borrowers, short of the administration's original goal of up to 4 million homeowners.

The program is funded with $50 billion in Troubled Assets Relief, or TARP, funds, putting it under the panel's grasp. "For every borrower who avoided foreclosure through HAMP last year, another 10 families lost their homes," the panel said of the administration's Home Affordable Modification Program.

"It now seems painfully obvious that Treasury's programs, even when they are fully operational, will not reach the overwhelming majority of homeowners in trouble."

The panel's report is the latest to slam the president's foreclosure prevention efforts.

Last month two additional federal government watchdogs unveiled blistering studies that condemned the current administration for inadequate execution of the Home Affordable Modification Program and they also raised serious doubts that four million struggling homeowners could remain in their homes.

The panel lays out a number of issues, such as the continued sustainability of the modified home loans and the final price tag to the tax payers, as well as, the true objectives of the program.

The panel is also worried that the half dozen foreclosure avoidance programs introduced by Department of Treasury over the previous year has lead to much confusion and delays.

If you know of anyone in your data base that has a FHA or VA loan, now is the time to make a call to them. If their interest rate is at or above 6% then they should consider a refinance. With FHA and VA there is a "Streamline Refi" available. What this means for the custormer is that even if the home value has gone down there is no need for an appraisal and they could lower their monthly payments. I have saved many of my clients hundreds of dollars per month with these loans. Interest rates are close to historic lows and when the government stops buying up the treasury bonds the rates will rise and people will misss out on these low rates.

Jerry Wright

425-238-2095

The fed funds were left unchanged today. On that news the mortgage bond have seen some pressure and are off aobut 19bp's. This should move rates up slightly in the afternoon and tomorrow morning. Applications rose in the last week by 8.2% though. The next big event will be the auctions on the 9th of $40B 3 yr bonds, $25B 10 yr bonds and $16B of 30 yr bonds.

Jerry Wright

Mortgage Advisor