Numerologists claim that there is a mystical connection between numbers, or series of numbers, and events that happen in your life. Here at the Homeownership Center we can’t answer paranormal questions but we can say that there REALLY IS a number that impacts your financial life and long-term homeownership success.
That number is your credit score.
The good news is that this number isn't mysterious… you can learn what your score is and – even better – learn how to improve it.
Your credit score is important. A low score not only means that you'll pay higher interest rates on mortgages, car loans, credit cards and other loans, but it can also prevent you from getting an apartment, keep you from being hired for a job you want, or cause you to pay more for insurance coverage.
A strong credit score is the key that unlocks the door to better loans, cheaper car insurance and more. YOU CAN build a good score and LSS Financial Counseling, a member of the Homeownership Advisors Network along with US Bank and Freddie Mac want to show you and your clients practical ways to improve your score at a free event next week:
- Learn how to improve your score after a financial setback
- Understand the credit scoring system and the steps to take to improve your score
- And much more.
Event Information:
DATE: Wednesday, November 6th, 2013
TIME: 7:00 – 8:30 pm
LOCATION: Center for Changing Lives
2400 Park Avenue S, Minneapolis, MN 55404
The event is FREE and everyone who attends will be entered in a drawing for a $50 gift card door prize!
During the 2012 State of the Union Address, President Obama announced another expansion of the federal mortgage refinance program :
That's why I'm sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low interest rates. No more red tape. No more runaround from the banks. A small fee on the largest financial institutions will ensure that it won't add to the deficit, and will give banks that were rescued by taxpayers a chance to repay a deficit of trust. (From the State of the Union Address)
The current versions of the refinance program (HARP and HARP II) allow homeowners whose loans are owned by Fannie Mae, Freddie Mac or the Federal Housing Finance Agency, to refinance to current historically-low interest rates, EVEN IF the loan value exceeds the value of the home (allows "underwater" homeowners the opportunity to refinance).
On Wednesday, February 1st, the president released additional information about the proposed expansion of the refinance programs:
The proposed program (HARP 3?) would allow ALL homeowners who are current on their mortgage — even those who do not have loans backed by Fannie, Freddie or FHFA and even if they're underwater on their mortgage — to also refinance their loans.
The proposal put forward by the administration includes some details about the who would qualify:
- only owner-occupied, single-family homes are eligible.
- Homeowners must be current on their mortgage and not had a lat payment for at least the past six months;
- Homeowners must have a minimum FICO credit score of 580;
- The loan amount cannot exceed the current federal conforming loan limit.
For those who meet the criteria, the program would allow for a streamlined application process in which lenders would only need to confirm that a homeowner is employed and the home would not have to be appraised.
NOW... What does this REALLY mean for the average Minnesota Homeowner who might want to refinance?
- Even though HARP II was announced in October of 2011, as of early February 2012, very few lenders and servicers have processes and procedures in place for homeowners to take advantage of the refinance program. Any formal expansion to the program announced today would take MONTHS before a homeowner would likely be able to work out a refinance with their lender. (See our blog post on the HARP 2.0 announcement in October, here)
- Most Importantly, this expanded program will require CONGRESSIONAL APPROVAL. Given the fact that we are in a rather contentious election year... approval by congress is far from certain.
We'll continue to monitor this program, and if the program expansion does become a reality, we'll notify Minnesota Homeowners via this blog and our website, here.
Earlier this week, mortgage giant Freddie Mac announced an expansion of its mortgage forbearance program to assist borrowers who are experiencing a financial hardship due to unemployment.
A forbearance is an agreement on the part of the lender or investor to withhold their claim to foreclose on a property - an agreement not to foreclosure for a set period of time.
According to Freddie Mac, their servicers can now offer eligible borrowers a short-term unemployment forbearance period of up to six months plus the possibility of an extended unemployment forbearance period if they remain unemployed for more than six months. (The six-month forbearance period is 'renewable' for a second six-month period, not to exceed a maximum of 12 months.) Under previous guidelines, the maximum period was six months.
In addition, this expanded program is now available for unemployed homeowners that are already performing under a HAMP or other loan modification program. If they continue to be eligible for HAMP or another loan modification program, they will be re-evaluated at the end of the forbearance period.
Freddie Mac has outlined some basic eligibility criteria for borrowers (the full criteria are available in their Single-Family Seller/Servicer Guide (Guide) Sections A65.26 through A65.28, here) that include:
- Borrower must currently be experiencing an an unemployment hardship;
- Borrower's current monthly housing expense-to-income ratio (excluding unemployment benefits) must be greater than 31%;
- Borrower's cash reserves cannot exceed 12 months of their monthly housing expense;
- Only a borrower's primary residence is eligible. Second homes and investment properties are ineligible.
- The property cannot be vacant, condemned, or abandoned.
Effective Date
Freddie Mac has strongly encouraged its servicers to begin offering eligible borrowers the unemployment forbearance relief options as soon as possible, but are required to begin offering unemployment forbearance to eligible borrowers no later than February 1, 2012.
Are you struggling with you mortgage and like to know if an unemployment forbearance - - or other solution - - is right for you? In Minnesota, the non-profit housing counselors in the Homeownership Advisors Network are available to meet with you FOR FREE to help you with your options to avoid foreclosure. To find your closest counselor, visit the Minnesota Homeownership Center's website here.
On Thursday December 1st, Fannie Mae and Freddie Mac both announced eviction moratoriums that will take place over the holidays. From December 19 through January 2, families living in properties where a Fannie Mae or Freddie Mac loan has been foreclosed upon will not be evicted.
NOTE: The legal and administrative processes for the evictions may continue during this time, but families will be able to stay in their homes. In addition, the GSE's will continue with the foreclosure process on delinquent borrowers during this time period as well.
Large mortgage servicers often follow suit – we will updated this blog if we learn of additional banks or servicers initiating moratoriums.
There are some nuances to the Fannie and Freddie moratoriums; additional details are available in the press releases here and here.
There is no "cold weather" rule regarding foreclosure or evictions after foreclosure in Minnesota. If you are struggling with mortgage payments or have questions about the process, contact a FREE non-profit Homeownership Adviser that specializes in foreclosure prevention TODAY. Waiting limits your options!
Servicers must assign a "Relationship Manager" to every struggling borrower
Some exciting news was released by the administration of the Making Home Affordable program yesterday (US Treasury and Fannie Mae). By no later than September 1st, every struggling homeowner that applies for a loan modification under Making Home Affordable must be assigned a single point of contact - who must be an employee of the servicer with a direct, toll-free telephone number - for homeowners to be able to communicate with about their documents, their application and answer questions. This same point of contact, known as a Relationship Manager, will also be available for non-profit counselors to use when speaking with the servicer about a homeowner's situation.
Servicers have until November 1st to assign a Relationship Manager to EXISTING MHA Consumers. (Homeowners that are already in review or in a trial modification).
If implemented correctly... this should end a huge number of the complaints the Center hears from homeowners that are struggling with their mortgage: "I can never speak to the same person twice," "They lose my paperwork," "I've had to send in the same document 3 or 4 times"... etc.
According to the Supplemental Directive 11-04 for Servicers, released on May 18th:
The same relationship manager is responsible for managing the borrower relationship throughout the entire delinquency or imminent default resolution process, including any home retention and non-foreclosure liquidation options, and, if the loan is subsequently referred to foreclosure, must be available to respond to borrower inquiries regarding the status of the foreclosure.
For now, the Supplemental Directive will only be in effect for servicers that are participating in the Making Home Affordable initiative, and have a Program Participation Cap of more than $75mm. Basically, this covers the largest 20 servicers in the country... and hopefully smaller servicers will follow suit. Both GSEs (Fannie Mae and Freddie Mac) are currently exempt from this directive. In Minnesota, given the partnership between Fannie Mae, the Minnesota Home Ownership Center and the Homeownership Advisors Network, there is already a single point of contact through the local non-profit counseling agency.
Will this improve the MHA program? What other improvements do you think are necessary... leave us a comment and let us know what you think!
Yesterday (June 23rd) the Minnesota Home Ownership Center, in partnership with US Bank, Freddie Mac and the City of Minneapolis, hosted the first day of a two-day Foreclosure Prevention Workshop at South High School in Minneapolis.
Dozens of homeowners received counseling and were able to meet face-to-face with their lender/servicer to discuss options to preventing their foreclosure.
Here are some of the comments we heard from homeowners as they were leaving the event:
Mission accomplished! I came tonight just to get [my bank] to listen to my situation. Not only did they listen... they said they'd lower my payment and my new paperwork will be at my house by the end of the week. Thank you!
I got more accomplished in 15 minutes here today than I've been able to accomplish in 3 months of trying to work with [my bank] on the phone. I'm so glad I came here tonight.
I just saw you on Fox-9... and decided to come over. I'm so glad I did. I finally got them to listen to my situation. Thanks!
Homeowners are welcome to come today (June 24) as well! Lenders, non-profit housing counselors and legal services representatives will be back at South High starting at 2:00 today. Do you have questions about your mortgage? Not sure where to turn? Feel free to drop by today and learn about the steps you can take to avoid foreclosure. Homeowners from any/all lenders and from anywhere in Minnesota are welcome to drop by.
The workshop was also highlighted by Jessica Mador on Minnesota Public Radio. The article is here.
A flyer for the workshop is available for download here.
Minneapolis Entry Cost / Down Payment & Affordable Loan Product Training
Thursday, June 10th, 2010
The MN Home Ownership Center, in partnership with the Minnesota Association of Realtors®, the City of Minneapolis, Freddie Mac and LiveMSP, is hosting a training on the recently developed tools offering comprehensive information about entry cost (down payment) and affordable loan programs available to buyers in the City of Minneapolis.
As Minnesota begins to recover from the recent foreclosure crisis, municipalities, lenders, non-profits, and others have developed programs designed to promote homeownership. This proliferation of programs has led to confusion among industry professionals asthey attempt to keep current on optimum opportunities for their clients.
Two sessions are available, and each 90-minute session will include:
- Details about accessing and using the MN Home Ownership Center’s Entry Cost Assistance Matrix, including a panel of speakers highlighting some of the most frequently used programs. The Neighborhood Stabilization Program will be featured.
- Information about accessing and using the MN Home Ownership Center’s Affordable Loan Product Matrix. Recently released to the public for the first time, the matrix includes valuable information about first-time homebuyer and other affordable loan programs. Lending representatives will be on hand to discuss their programs.
BEST OF ALL - - THIS TRAINING IS FREE! And CEU Credits have been applied for.
Space is limited and registration is required. You can learn more and register online here.
TWO SESSIONS OF THIS TRAINING ARE AVAILABLE:
(The same information is repeated in both sessions)
- Morning Session . . . . . . . . . . 6/10/2010 - 10:00 - 11:30am
- Afternoon Session . . . . . . . . . 6/10/2010 - 1:00 - 2:30pm
There's also an opportunity to join us in networking lunch ($10.00, includes lunch) that will be held between the sessions (11:30am - 1:00pm).
Space is LIMITED... learn more here.
Here’s some food for thought… President Obama’s Homeowner Affordability and Stability Plan, the details of which will be available next week, focuses heavily on Fannie Mae and Freddie Mac backed mortgages. However, according to a presentation given by James Lockhart , the Director of the Federal Housing Finance Agency (FHFA), to the Association of Government Accountants on the 19th of February, third quarter 2008 national default information shows that while private label (private investor) backed mortgages are only 16% of all outstanding mortgages, they account for 62% of all seriously delinquent mortgages.The FHFA report defines seriously delinquent as a payment that is at least 90-days past due.In addition, Freddie and Fannie account for 56% of all outstanding mortgages, but only 19% of seriously delinquent mortgages.PLUS, mortgages held in a bank’s portfolio account for 16% of all outstanding mortgages, and only 6% of seriously delinquent mortgages.
Can we infer anything from this information? Prior to 2008, and now again in 2009, Fannie and Freddie required that their home buyers complete a certified Home Buyer Education Workshop - - known as Home Stretch in Minnesota. Many of the bank portfolio loans – especially first-time buyer programs and low- to moderate-buyer programs, ALSO required home buyer education - - especially in Minnesota. Is this a fair inference? Feel free to discuss in the comments.The Minnesota Home Ownership Center believes that Home Stretch, homebuyer education and counseling is key to making informed decisions about the important choices related to homeownership. Is homeownership right for YOU? Home Stretch can help answer that question.Are you having difficulty making a payment? Whether your mortgage is owned by Fannie Mae or Freddie Mac - - or any other lender or servicer, the Minnesota Home Ownership Center’s network of Foreclosure Counselors can help. Click here for more information.
