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Mortgage Q & A: Will the Government Shutdown Affect My Home Loan Application?

Posted in Government Programs | October 10, 2013

Q: I’m applying for an FHA home loan and my lender has just notified me that they need a transcript of my IRS records, but the government shutdown has closed the IRS. What will happen to government-backed loan applications in process when the shutdown started? A: the answer depends on your lender. The IRS has shut down the majority of its operations; it’s unlikely that the document your lender needs will be available until the shutdown is resolved. Talk with your loan officer to see if alternative  documentation can be submitted in place of the IRS document. Many lenders have altered their policies and are finding alternative ways to verify income during this time. FHA and VA Loan Processing Continues Most applicants for VA and FHA loans will probably encounter few shutdown-related problems.. The Department



Shutdown Will NOT Stop Government Mortgages or Roadblock Housing Recovery

Posted in Government Programs | September 30, 2013

If you’re looking at buying or refinancing a home and you need a VA, USDA or FHA mortgage, the looming government shutdown looks pretty scary. Headlines all over the Internet are screaming that borrowers won’t be able to get government loans during the shutdown and that this could send the housing recovery right into some giant toilet. Even reputable sites like CNNMoney have missed the mark, and here’s why. Most HUD and VA Functions Are Automated Yes, HUD says that during the shutdown, only 3.8 percent of its 9,500+ employees will continue to work. This has led many to conclude that FHA won’t be able to underwrite loans, or at least, not many loans. And that’s probably true — the thing is, most FHA mortgages are not underwritten by HUD



Freddie and Fannie May Decrease Conforming Loan Limits

Posted in Buying a Home, Government Programs | September 10, 2013

The folks in Washington are making noise about reducing the amounts home buyers can finance through Fannie Mae and Freddie Mac. Currently, both companies allow mortgages as high as $417,000 in the majority of the country and up to $625,000 in the most expensive housing markets — for example San Francisco, Boston and Washington D.C. The idea is that reducing these limits will lower taxpayers’ exposure to risk through the government-sponsored enterprises (GSEs). Mortgage Bankers Association president and CEO David Stevens believes the loan limits will be adjusted downward to $400,000 and $600,000, respectively. While it seems like a fairly small reduction, Stevens says that as long as non-GSE lenders aren’t willing to step up, it will cut credit availability to middle class home buyers. “While the change will be



MORE Fee Increases Ahead for Fannie Mae and Freddie Mac?!

Posted in Government Programs, Market News, Mortgage Rates | July 16, 2013

Despite the fact that since 2011, the government-sponsored enterprises’ average combined guarantee fees have nearly doubled, the Federal Housing Finance Agency (FHFA) has announced that it plans to increase fees yet again. Fannie Mae and Freddie Mac, under government conservatorship,  achieved major profits during the housing recovery and regained almost absolute dominance (90 percent market share) in the mortgage industry. Fannie Mae’s net income of $17.2 billion last year actually was more than that of Berkshire Hathaway, General Electric or Walmart. Profits generated by the government-sponsored enterprises has been used to reduce the deficit and offset the temporary payroll tax decrease, which was implemented to stimulate the economy. HUD Halts FHA Fee Increases Only one thing is standing in the way of additional fee increases on Fannie and Freddie loans —



Hagel: DOMA Decision Will Open Up VA Home Loans to Same Sex Married Couples

Posted in Buying a Home, Financing, Government Programs, VA Loans | June 26, 2013

Since the Supreme Court ruled that the Defense of Marriage Act (DOMA) is unconstitutional, there may be some fallout in the world of mortgage — specifically, VA mortgages. VA home loans are fully available to couples, married or unmarried, as long as both parties are eligible for VA benefits — that is, they are qualifying servicemembers, veterans or surviving spouses. However, if only one of the parties qualifies on his or her own for VA financing, a married couple can still borrow the maximum amount, as long as one member is a man and the other a woman. Same sex married couples are allowed only the reduced benefit of non-married joint buyers. The VA explicitly states that a “spouse” must be someone of the opposite sex. That means married same-sex couples



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