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 In This Issue Realtor Insider DC News and Events NAR makes statement regarding the need to implement 4-Point Housing Stimulus plan to the House Financial Services Committee Conventional Residential Lending Report Fannie Mae Gives Servicers More Flexibility to Help Borrowers Avoid Foreclosure Streamlined Loan Modification Program Environment Report NAR Submits Comment on Proposed Carbon Regulation Housing Report Loan Limits to Expire, but Hope for Early Next Year NAR President McMillan Urges Obama Transition to Propose Housing Stimulus Realtor Insider DC News and Events  NAR makes statement regarding the need to implement 4-Point Housing Stimulus plan to the House Financial Services Committee On December 10, the House Financial Services Committee (HFSC) held a hearing on the implementation of the Troubled Asset Relief Program (TARP) that was authorized by the Emergency Economic Stabilization Act (EESA) of 2008. The hearing was extremely contentious as members on both sides of the aisle criticized the U.S. Treasury Department for not implementing the TARP in the spirit that the U.S. Congress intended. However, during the hearing, a number of members asked the Treasury representative, the Honorable Neel Kashkari, if his organization was considering a mortgage interest rate buy-down program – a major focal point of NAR's 4-Point Housing Stimulus plan. Mr. Kashkari indicated that the U.S. Treasury was strongly considering a plan that would reduce mortgage interest rates to 4.5%; however, they have not determined the method for accomplishing this task. NAR submitted a statement (see attachment) to the HFSC indicating the need to implement the 4-Point Housing Stimulus Plan, especially, the mortgage interest rate buy-down program. NAR's Statement to the HFSC for the TARP Oversight hearing on December 10th Tony Hutchinson 202-383-1120, Jeff Lischer 202-383-1117 back to top Conventional Residential Lending Report Fannie Mae Gives Servicers More Flexibility to Help Borrowers Avoid Foreclosure On December 8, 2008, Fannie Mae announced it was giving mortgages servicers more flexibility and more loss mitigation options to minimize foreclosures. The changes will allow servicers to act earlier to avoid potential delinquencies. The changes affect mortgages in mortgage backed securities (MBSs) and mortgages held by Fannie Mae in portfolio. The changes "build on and complement" the Streamlined Loan Modification Program (SLMP) that takes effect on December 15, 2008, and is described elsewhere in this week's Washington Report. Highlights of the changes include:
Freddie Mac guidelines also permit servicers to address problems faced by borrowers who are at risk of imminent default. It is not known whether Freddie is considering enhancing this policy to complement the SLMP. Fannie Mae Press Release on Announcement 08-31 Fannie Mae Announcement 08-31 (23 pages) Jeff Lischer 202-383-1117, Tony Hutchinson 202-383-1120 back to top Streamlined Loan Modification Program On December 15, 2008, the Streamlined Loan Modification Program (SLMP) goes into effect. It was announced in November by the Federal Housing Finance Agency (FHFA), the Department of Housing and Urban Development (HUD), the Treasury Department, and the HOPE NOW Alliance representing the vast majority of mortgage lenders and mortgage. The SLMP applies not only to mortgages held or securitized by Fannie Mae and Freddie Mac but also to mortgages held by lenders in portfolio and mortgages in private label securities. The program complements other individual lender initiatives to minimize foreclosures. The goal of the SLMP is to reduce preventable foreclosures by establishing a streamlined loan modification program. The SLMP sets an industry standard for helping borrowers at risk of losing their homes. The program is aimed at borrowers at least 90 days delinquent who are at the highest risk of losing their homes. The program is limited to borrowers who own and occupy homes as their primary residences and who are not in bankruptcy. To apply, a borrower should contact the mortgage loan servicer, provide required information about the borrower's income, submit a hardship statement, and certify the borrower did not purposely default to obtain a loan modification. Under the program, an affordable mortgage is a mortgage where the payment does not exceed 38 percent of monthly gross income. The lower payment can be achieved by reducing the interest rate, extending the term of the loan, deferring (but not forgiving) payment of principal, or a combination. Where the servicer cannot make the loan affordable under the SLMP, it may address the problem on a case-by-case basis. As an incentive to participate, servicers will receive $800 for each loan modified under the SLMP. FHFA Statement Announcing Streamlined Loan Modification Program (including Questions and Answers explaining the program) Jeff Lischer 202-383-1117, Tony Hutchinson 202-383-1120 back to top Environment Report NAR Submits Comment on Proposed Carbon Regulation Responding to an EPA advance notice, NAR submitted comments opposing climate regulations under the Clean Air Act. According to the EPA, the Act requires permits and upgrades to build, expand or operate tens of thousands of commercial office and apartments buildings, unless courts look the other way as EPA proposes to ignore the law. The Supreme Court has ordered EPA to move forward with regulation; only Congress can stop it. NAR will be looking to Congress as it considers broader climate legislation next year. Read NAR's comment letter Russell Riggs 202-383-1259, Austin Perez 202-383-1046 back to top Housing Report Loan Limits to Expire, but Hope for Early Next Year The 2008 loan limits for FHA, Freddie Mac, and Fannie Mae will expire on December 31, 2008. NAR and several Congressional supporters have been working to extend this deadline, but it is unlikely to happen before the expiration date. However, Rep. Barney Frank (D-MA) this week announced that he expected the 2008 loan limits to be restored as soon as the 111th Congress convenes in January. NAR will continue working on this issue. FHA Loan Limits Chart Mortgagee Letter 08-36: 2009 FHA Maximum Mortgage Limits NAR Letter to HUD on Appeals Process Megan Booth 202-383-1222, Jerome Nagy 202-383-1233 back to top NAR President McMillan Urges Obama Transition to Propose Housing Stimulus In a letter transmitted to key Obama Transition officials on December 5, NAR President Charles McMillan voiced strong support for the housing finance provisions of NAR'S Four Point Housing Stimulus Plan. Saying that a key to overall economic recovery is the stabilization and recovery of the housing market, McMillan urged the incoming administration to support provisions to make permanent the 2008 increases in FHA and GSE loan limits and to institute a federal buydown of mortgage interest rates. The NAR letter also calls for making the recently enacted homebuyer tax credit available for all home purchasers and scrapping its repayment requirement. NAR continues in communication with Transition officials. Read Letter to Obama Transition Team William Gilmartin 202-383-1102 back to top Go to archived weekly reports >> Last Updated: 12/15/2008 Bira de Aquino |
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