Gulf Coast Associates' Blog: Mortgage Information

A U. S. District Judge issued a temporary order yesterday blocking HUD's new rule prohibiting the use of seller-financed mortgage down-payment assistance programs. Such programs allow non-profit organizations, like AmeriDream and Nehemiah, to help buyers with down payments and be reimbursed by the seller. HUD, the IRS, and the Government Accountability Office had questioned the value of these programs, noting that "borrowers who used them were more than twice as likely to default on their mortgages or become delinquent in their payments" versus other borrowers with loans backed by FHA.

In a four-page ruling the Judge said HUD “failed to supply a reasoned analysis for its departure from its long-standing policy of approval” of the program and that such a…

The Department of Housing and Urban Development (HUD) announced on October 1, 2007, its final ruling on seller paid down payment assistance. The new ruling identifies seller funded down payment assistance programs in a new home purchase as an unacceptable source of funds. Any transaction in which the seller makes a contribution to a third party, such as a non-profit Gift/Grant Program organization, and the entity then makes a contribution to a borrower for the purpose of down payment assistance, has been ruled unacceptable.

The effective date of this ruling is October 31, 2007. The only exception is the Nehemiah Down Payment Assistance Program which has been granted a six month extension through March 31, 2008. It is expected that the Federal Housing…

If you've found yourself in the nerve wracking and precarious position of not being able to make your mortgage payments - or you're consistently paying late and receiving phone and mail contacts - this information is custom made for you. It may surprise you that most mortgage servicers (the company that collects your payment) want to work something out with you. However, if you don't answer their phone calls or respond to mail inquiries - then you're not going to get any help and will probably lose your home and ruin your credit for years to come.

Based on the reason why you've become delinquent, the mortgage company may suggest plans to help get you current again. But, be aware that ignoring them will not make the situation go away and the longer you…

The Federal Open Market Committee, the monetary policy arm of the Federal Reserve, held their September meeting today and by unanimous decision, lowered both the Fed funds and Discount rates by 50 basis points each. It was a bold move to help an economy trying to deal with the recent developments in the financial markets; specifically, a tightening of credit conditions that was intensifying the housing correction.

The rate cuts are designed to forestall adverse economic conditions, foster price stability, sustain growth and hopefully ward off the potential for a recession. In addition, they will help with the growing foreclosure situation, keeping mortgage rates low and give a boost to the ailing housing market.

Recent evidence shows that the risk of…

As those of you who have read our Blog before know, we are not fond of how a large segment of the mortgage industry has conducted itself in the last few years. Common sense went out the window in order for lenders to make huge profits under the guise of helping borrowers obtain more housing opportunities. Unfortunately, it doesn't take an economics degree to see where that got us. Making bad loans because you can does not mean you should. And, originators making them in order to pad their income is even worse.

Perhaps the saddest part of all is that, to date, we've seen very little of the industry actually doing anything to curb the abuses. In fact, we were dumbfounded recently after attending a seminar, where it was made crystal clear that subprime is…

We wanted to give you an update on our government reform post regarding the announcement of the new FHA Secure mortgage refinancing program. FHA Secure is designed for families who are good borrowers but were steered into high-cost ARM loans with teaser rates.

To qualify for FHA Secure, eligible homeowners must meet the following criteria:

• The loan must be a non-FHA ARM.
• A history of on-time mortgage payments "prior" to the borrower's ARM loan resetting to the higher rate.
• The Arm loan interest rate must have either reset or be scheduled to reset between June 2005 and December 2009.
• Mortgage late's are allowed after the reset date if they are directly related to your higher loan payment. In addition, if you are in a mortgage…

In response to the so called "crisis" in the mortgage markets, the Federal government responded today, and in some cases, is taking action for trying to clean up the credit mess. While we've suggested in a past post that the industry itself needs to take steps for correcting the situation, some of the moves the government is considering may help those suffering from possible mortgage abuses in the past few years.

President Bush announced today the new FHA Secure program for helping borrowers with good credit to refinance their ARM loans if they are behind in their payments. The program is expected to help around 80,000 individuals who are not in foreclosure but are experiencing difficulties. While it is a step in the right direction, in and of itself, it…

Many times we're asked about whether or not several mortgage lenders pulling a credit report will affect a borrowers' credit rating. When you are shopping for a mortgage loan, it is not uncommon to have more than one "lender" looking at your credit.  For that reason your FICO score will not be affected if the inquiries are made within a short period of time, usually 30 days. For instance, a mortgage inquiry by three lenders on three different days in the past 30 days will not be counted against you at all in terms of the score. However, a little known fact is that some lenders can also select an older version of the FICO scoring formula that will shorten this period to 14 days. If this method is used then it's very possible that your score will be…