Home Path by Fannie Mae

Home Path by Fannie Mae

Buyers looking for a good resource for foreclosed homes and financing should take a minute to check it out.  What Fannie Mae has done is consolidate their entire inventory of homes across the county in one location.  Their web site is user friendly and searchable by state, price, county and even by bedroom and bathroom count!  The site combines multiple photos of properties, good detailed property descriptions and links to the local real estate professional that can further assist your home search. 

All HomePath properties are subject to what is known as the “First Look” initiative.  This initiative was established to encourage home ownership and thereby stabilize neighborhoods that have been adversely affected by an increased inventory of lender owned homes.  During the “First Look” period owner occupants, public entities and their partners can submit offer without competition from investor purchasers.  They have provided a count down on each property page to inform all buyer when this expires.

Fannie Mae has also developed special financing for their properties that are for sale.  There are two types of financing available, HomePath Mortgage Financing and HomePath Renovation Mortgage Financing.  As you search for properties each will indicate if HomePath Mortgage Financing, HomePath Renovation Mortgage Financing or both are available on the property page.  HomePath Renovation Financing is similar to FHA financing but with added benefits.  Home can be purchased for as little as 3% down and down payment can be funded by your own savings, a gift or grant or even a loan from a nonprofit, possibly no mortgage insurance(discuss with lender) and no appraisal fee! This product is available for both owner occupant and investors.  HomePath Renovation Mortgage Financing is only for homes that are to be your primary residence and is used to financing the home and “light renovations.”  The home can also be purchased for as little as 3% down and the down payment can be funded by your own savings, a gift or grant or even a loan from a nonprofit, possibly no mortgage insurance(discuss with lender) and no appraisal fee! This will allow buyer to purchase the home that may not be in the best condition but can be renovated to the buyer’s tastes.   Each of these products are offers by a prescreened and selected group of lenders so be sure to check www.homepath.com for lenders in your state.

As part of Fannie Mae’s commitment to neighborhood stabilization and homeownership they are currently offering special incentives for owner occupant purchasers.  Fannie Mae will pay up to 3.5% in closing cost assistance and pay a $1500 selling broker bonus for owner occupant purchasers that purchase a HomePath property.  Accepted offer must close by 12/31/2010 and within 60 days of acceptance. 

We thought this would be a good comprehensive “one stop” site for buyer looking to purchase that dream home and get it financed.  Let us know what you think. 

Visit www.homepath.com for more information.

Loan Modification Programs and their Effectiveness

As we all know the entire country is saturated with foreclosed homes.  With record unemployment and under employment, it does not seem that it is going to change any time soon.  There are conservative estimates that the “foreclosure crisis” could last upward of another 40 months given the foreclosure rate and the looming shadow inventory.  What does this mean for home owners?  Right now home ownership has slipped to the lowest levels in a decade, home prices have steadily been on the decline,  combined with job loss and their home being “under water” it is next to impossible to refinance their home.  But have no fear there are options available to help owners.

The most notable of these is the Home Affordable Modification Program (HAMP).  This is a government sponsored program whereby homeowners can modify their mortgages if they meet certain criteria.  The home has to be your primary residence, you must owe less than $729,750 on your primary mortgage, must have owned the home prior to January 1, 2009 and your first mortgage, including P.I.T.I, must be greater than 31% of your gross income.  This program is geared toward owners that are having trouble paying their current mortgages such as someone that recently had a reduction in hours or is currently “under-employed.” 

An additional government sponsored program is the Home Affordable Refinance Program (HARP). This program is for owner occupants in 1 to 4 unit dwellings that must be their primary residence.  Your loan must be owned or guaranteed by Fannie Mae or Freddie Mac.  At the time of application you must be current on your mortgage payments and the amount owed on the home does not exceed 125% of current market value.  This program is for people that are making their payments but cannot take advantage of lower rates due to their homes being “upside down” where they owe more than their home is worth.

If a homeowner has modified their loan through the HAMP or HARP programs and did not successfully complete the terms of the trail modification or had the loan modified and missed 2 consecutive payments there is another option that is available.  There is the Home Affordable Foreclosure Alternative Program (HAFA). This program will allow owners to short sale their home or provide the mortgagee a deed in lieu of foreclosure.  

The effectiveness of these programs can be debated, ask any homeowner that has had their loan modified and their answer would be “it was resounding success” however, ask another homeowner that lost their home to foreclosure because they were bogged down in the red tape and bureaucracy and I believe their thoughts on the program would be decidedly different.  Somewhere in the middle is the actual effectiveness of the programs.  According DS News as reported on 11/01/2010:

“According to the latest estimates from HOPE NOW, the private sector alliance of servicers, investors, mortgage insurers,

and nonprofit housing counselors.

Data released by the organization Monday shows that the industry completed close to 150,000 permanent loan modifications

during the month of September alone – 120,000 of which were through servicers own proprietary programs and 27,840 under

 the federal government’s Home Affordable Modification Program (HAMP)”

The private sector loan modifications are happening at nearly a 4 to 1 ratio, this is a staggering statistic!  Additionally, nearly 50% of participants in various loan modification programs have fallen out of these programs.  Unfortunately, due to the economy and lack of employment some people cannot afford their home no matter how greatly their mortgages are modified. 

While these programs have certainly provided valuable aid to people who desperately need it, the over effectiveness can certainly be questioned.  It would appear that they, to this point, have not lived up to their billing.  Let us know what you think about these programs, past experience with loan modification or any insight you may have. 

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