What Happens When Homeowners Leave Their Forbearance Plans?

 

According to the latest report from Black Knight, Inc., a well-respected provider of data and analytics for mortgage companies, 6.48 million households have entered a forbearance plan as a result of financial concerns brought on by the COVID-19 pandemic. Here’s where these homeowners stand right now: 2,543,000 (39%) are current on their payments and have left the program 625,000 (9%) have paid off their mortgages 434,000 (7%) have negotiated a repayment plan and have left the program 2,254,000 (35%) have extended their original forbearance plan 512,000 (8%) are still in their original forbearance plan 116,000 (2%) have left the program and are still behind on payments This shows that of the almost 3.72 million homeowners who have left the program, only 116,000 (2%) exited while they were still behind on their payments. There are still 2.77 million borrowers in a forbearance program. No one knows for sure how many of those will become foreclosures. There are, however, three major reasons why most experts believe there will not be a tsunami of foreclosures as we saw during the housing crash over a decade ago: Almost 30% of borrowers in forbearance are still current on their mortgage payments. Banks likely don’t want to repeat the mistakes of 2008-2012 when they put large numbers of foreclosures on their books. This time, many will instead negotiate a modification plan with the borrower, which will enable households to maintain ownership of the home. With the significant equity homeowners have today, many will be able to sell instead of going into foreclosure. Will there be foreclosures coming to the market? Yes. There are hundreds of thousands of foreclosures in this country each year. People experience economic hardships, and in some cases, are not able to meet their mortgage obligations. Here’s the breakdown of new foreclosures over the last three years, prior to the pandemic: 2017: 314,220 2018: 279,040 2019: 277,520 Through the first three quarters of 2020 (the latest data available), there were only 114,780 new foreclosures. If 10% of those currently in forbearance go to foreclosure, 275,000 foreclosures would be added to the market in 2021. That would be an average year as the numbers above show. What happens if the number is more than 10%? If we do experience a higher foreclosure rate from those in forbearance, most experts believe the current housing market will easily absorb the excess inventory. We entered 2020 with 1,210,000 single-family homes available for purchase. At the time, that was low and problematic. The market was experiencing high buyer demand, and we needed more houses to meet that demand. We’re now entering 2021 with 320,000 fewer homes for sale, while buyer demand remains extremely strong. This means the housing market has the capacity to soak up a lot of inventory. Bottom Line There will be more foreclosures entering the market later this year, especially compared to the record-low numbers in 2020. However, the market will be able to handle the increase as buyer demand remains strong.

It's a Good Life!!! Greg Novak MBA NMLS # 329079 Vice President / Partner American Mortgage Office - 386-756-8228 Cell - 386-846-6686 Fax - 386-756-8108 Website - www.AmericanMortgageNow.com   Oh, by the way,  If you know someone who is thinking about buying or refinancing a home, please give me a call with their name and number, I will be happy to follow up with them for you.   FLORIDA- American Mortgage Loan Services, LLC. - NMLS Company ID 330596

Achieving Success

Achieving SUCCESS = P + I + P + P + O = S

On July 20th, 1969 Neil Armstrong and Buzz Aldrin aboard Apollo 11 became the first men to walk on the surface of the moon. SUCCESS!!! A goal was set, a Plan was made, doubters and critics were Ignored, limits were Pushed, Positivity was promoted, and fears were Overcome. Success was achieved.

Plan - Create a PLAN with your Goals in mind. Your Goals are what you see as success. Just having goals does not automatically mean you are going to achieve them. You have to make a plan for each goal and put it in writing in a step by step plan to achieve that goal.

Ignore - Ignore all of the critics and doubters. No matter how big or small or crazy your goal may be there will always be someone to tell you that you can not do it. Ignore those people, they obviously don't know what success is. Surround yourself with successful people who will encourage and support you.

Push - Push the limits. Some people will tell you to know your limits so you don't go to far and fail at something or get disappointed. I say know your limits so you know what to push. People tell me all the time that they can not believe some of the things that my kids can do at such young ages. They play Hockey, and gymnastics, and climb trees, and ropes, and shoot archery, and do all kinds of things that kids their age don't do. Why because I have never told them they can't. Now obviously I protect them and do everything I can to keep them from seriously hurting themselves, but I let them do things where they push the limits. They might get a little hurt doing some things, but my opinion is that will only make them stronger. We have friends that are so over protective of their children they have conditioned them to not take risks and to be afraid of anything new. You must push your limits.

Positive - You must stay positive. Stinkin thinkin never helped anyone achieve success. Immerse yourself, in positive books, CD's, articles, other information, and surround yourself with other positive thinking people.

Overcome - In order to acheive success you must be an overcomer. You must be able to overcome your fears and past failures. Zig Ziglar says this about overcoming your past failures "Failure is an event, it is NOT a person. Yesterday really did end last night, and today is your brand new day. You have to make friends with your past, be focused on the present, and optimistic about your future. You know that success (a win) doesn't make you, and failure (a loss) doesn't break you."

Points of Fact - Here are a couple quick points of fact about the goal and race to put a man on the moon.

1. On May 25th 1961 President John Kennedy set the goal to congress that the United States would put a man on the moon and bring him back safely before the end of the decade.
 
2. Prior to the successful Apollo 11 Manned Moon landing, there were 15 failed lunar missions, 2 Partial success, and only 8 successful lunar missions. (3 of the 8 successful missions were crash landings into the moon. They were considered successful because they were able to break earths gravity and have the correct calculations to get to the moon. The partial successes were successful because they broke earths gravity, but the trajectory was off and they missed the moon.) (The Soviets had 28 Failed lunar missions and only 9 successful unmanned moon missions)


It's a Good Life!!!
Greg Novak MBA
NMLS # 329079
Vice President / Partner
American Mortgage
Cell - 386-846-6686
Office - 386-756-8228
Fax - 386-756-8108
Website - www.AmericanMortgageNow.com

Oh, by the way, If you know someone who is thinking about buying or refinancing a home, please give me a call with their name and number, I will be happy to follow up with them for you.

FLORIDA- American Mortgage Loan Services, Inc. - NMLS Company ID 330596

HARP 2.0 - "Obama Loan" update

Good Morning,

     Back in December I wrote an e-mail post about current rates and “The Obama Loan”, more accurately Known as HARP 2.0.   HARP 2.0 has been back in the news a lot lately and I have received many inquiries regarding the program and how it works. 



     Back in November when the program was announced, the lending community did not know exactly how this program was going to unfold or what “overlays” to the guidelines they were going to place.   The one thing we did know is that whatever the guidelines on the new program were, they were not going to take effect until March 2012.  Fannie Mae published an update to its “Refi Plus” program which HARP 2.0 falls under, so I figured I would e-mail this information out because we are now getting very close to the launch of the HARP 2.0 program.



     Here is a link to the actual Fannie Mae announcement.  CLICK HERE  Then Click on the link for HARP 2.0 Guides in info,  or cut and paste this address to your browser.   http://americanmortgagenow.com/custompage-view.aspx?id=27

 

The Bullet Points – Here are the main points and things to know about this program to determine if you or someone you know may benefit from it. 

1^st – Your current loan must be a Fannie Mae or Freddie Mac Loan.   Here is a link to my website that has two Look up tools to determine if Fannie or Freddie owns your mortgage.  http://americanmortgagenow.com/resources.aspx

2^nd – You must be current on your Mortgage.  You cannot have had any late payments in the last 6 months and no more than 1 late in last 12 months. 

3^rd  - Loan to Value.  At this time we are not 100% sure what the loan to value restrictions are going to be on this program.  As you can see from the guidelines put out by Fannie Mae, they are removing the LTV limits from the prior HARP 1.0 of 125% to unlimited LTV.  Unfortunately, I doubt any lenders will truly offer unlimited LTV, I do however expect the maximum LTV requirements to go up significantly.  (You may have already seen lenders advertising that they are now doing the HARP 2.0 loan.  They are not, all they have done is increase their Max LTV to 125% to match the already in existence HARP 1.0 loan.  Many lenders previously were only offering LTV’s up to 105%) 

4^th  -  Removal of Bankruptcy & Foreclosure policy.  HARP 2.0 removes the required waiting periods and reestablished credit requirements to qualify for this program.  The only time you would have to credit qualify is if your payment is increasing as a result of the refinance.  This would occur if someone was going from an ARM, Interest only, or Negative Amort loan, etc. 



     I hope you find this information useful.  As we get closer to launch date and we receive more updated information I will be sure to pass it alone.  Please call me directly if you have any questions or would like to see if you will qualify for this program.  Greg Novak  386-846-6686.



Additionally here is a direct link to the Home Affordable Refinance Program (HARP) official website.  http://www.makinghomeaffordable.gov/programs/lower-rates/Pages/harp.aspx

 

It's a Good Life!!!

Greg Novak MBA

NMLS # 329079

Vice President / Partner

American Mortgage

Cell - 386-846-6686

Office - 386-756-8228

Fax - 386-756-8108

Website - www.AmericanMortgageNow.com

 

Oh, by the way,  If you know someone who is thinking about buying or refinancing a home, please give me a call with their name and number, I will be happy to follow up with them for you.

 

FLORIDA- American Mortgage Loan Services, Inc. - NMLS Company ID 330596

 

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Rates & "The Obama Loan"

So the news Media has been Harping on two subjects lately regarding the mortgage industry, I figured i would really quickly touch on both of them.

First, Rates. Rates again are pushing all time lows in the 3's and APR's in the high 3's or low 4's. Now truly is a great time to buy or refinance.

I recently refinanced a client who had a 30 year fixed rate of 6.25%. We refinanced them to a 15 year loan and there payment only changed by $6 per month.

If you know anyone who is thinking about buying or refinancing, please have the give me a call. Greg Novak 386-846-6686



Second, "THE Obama Loan." I have received a number of calls from people seeking information on the new "Obama Loan". I figured a lot of people are probably curious about the loan and what the actual facts of what the program entail.

1st - Lets get my political opinion's out of the way. The Media hype and spin Washington has put on this loan is not a whole lot more than campaign efforts to help with their re-election. Once again, Washington has failed to come up with a program to help the people who need it the most.

2nd - Facts about this loan. It already Exists. The actual name of this loan is HARP 2.0. It's predecessor and current sister loan HARP 1.0 has been out and in the tool belt of the mortgage industry for over 2 years now.

3rd - Facts about the current program. The HARP loan was designed for people who currently are able to make their mortgage payments and have not had any late payments in the last 12 months. The applicant for HARP must be able to prove income, assets, and credit worthiness. Qualifying for a HARP loan is basically the same as qualifying for a standard fannie mae mortgage refinance, with one exception, the Loan to Value. HARP currently allows you to refinance your current 1st Mortgage as long as your total combined Loan to Values, including all subordinated loans does not exceed 125% of the appraised value. You can not combine first and second mortgages together. The second mortgage must be willing to re-subordinate and the total can not exceed the 125% loan to value.

4th - The Change. HARP 2.0, "The Obama Loan" only changes one thing, and that is the loan to value restriction. HARP 2.0 is supposed to remove restrictions on loan to value allowing home owners to refinance their home regardless of what they owe on it vs how much it is worth. You still can not combine firsts and second mortgages, and contrary to what seems to be a popular belief, the government is not going to reduce your loan balance down to what the appraised value is.

5th - The bad news. The bad news is that although this mortgage was supposed to take effect in the beginning of November, Fannie Mae has announced that they will not be adjusting their underwriting systems to the new program until at the earliest March 2012. Therefore, lenders will be unable to sell loans based on the new guidelines and will not be offering them until that time. Additionally, current speculation is that no lender is actually going to allow unlimited Loan to Value. It is expected that the current 125% max will increase, but lenders will impose their own overlay's based on their own desired risk tolerances for LTV.

6th - The Good News. The good news is that, as I stated before, this loan already exists. You can have all of the benefits of this new great super loan right now with one exception, and that is the max 125% loan to value. So if you think that you may benefit from this loan and you owe less that 125% of what your home is worth, give us a call. Greg Novak 386-846-6686

Here are a few links to some news articles regarding the Updated HARP 2.0.

HARP 2.0 – The New Mortgage Plan http://smartmortgageadvice.com/?p=942

Sizing Up HARP 2.0 http://www.smartmoney.com/spend/real-estate/sizing-up-harp-20-1322685479452/

HARP 2.0 rules, and who will benefit http://www.marketwatch.com/story/harp-20-rules-and-who-will-benefit-2011-11-18

The Official Website Home Affordable Refinance Program (HARP) http://www.makinghomeaffordable.gov/programs/lower-rates/Pages/harp.aspx

It's a Good Life!!!

Greg Novak MBA

NMLS # 329079

Vice President / Partner

American Mortgage

Cell - 386-846-6686

Office - 386-756-8228

Fax - 386-756-8108

Website - http://www.americanmortgagenow.com/

Oh, by the way, If you know someone who is thinking about buying or refinancing a home, please give me a call with their name and number, I will be happy to follow up with them for you.

FLORIDA- American Mortgage Loan Services, Inc. - NMLS Company ID 330596