Author Archives: Rhonda Porter

About Rhonda Porter

Rhonda Porter is an NMLS Licensed Mortgage Originator MLO121324 for homes located in Washington state. Her blog, The Mortgage Porter, is nationally recognized for sharing relevant information to consumers about mortgages. She has been originating mortgages since 2000 at Mortgage Master Service Corporation #40445 Consumer NMLS Website: http://www.nmlsconsumeraccess.org/TuringTestPage.aspx?ReturnUrl=/EntityDetails.aspx/COMPANY/40445 NMLS ID 40445. Equal Housing Opportunity. You can follow Rhonda on @mortgageporter, Facebook and/or Google+

A Rebuttal to the RESPA Reform Poem

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Over at Mortgage Porter, I posted a poem that one of my coworkers penned for humor about the new Good Faith Estimate.   One of my readers, who wishes to remain anonymous, has submitted a rebuttal which I think is very worthy of sharing here.  

Twas the week before Christmas
When a poem made its rounds
About a change in RESPA
That was about to hit the town

HUD said it was good
It would limit the greed
Protect all consumers
And a nation in need

A nation that was harmed
By the very same practice
They seek to preserve
Though we all pay though our taxes

Nation, wake up! We must awake from our slumber!
The path we were on will take us all under
If we do not learn, and learn today
It can all be gone
Like it almost was Columbus Day

Do you not remember? Can you not see?
What securitization, corruption has done to thee?
The stock market tanked
Foreclosures still run rampant
And they said, even so, you cannot make this happen

Assemble the lobbyists, consumer groups and more
Awake your Congressman, Senator
Or contributions no more
“Kill this thing, kill this thing,

It’s a Wrap…the New vs Old Good Faith Estimate

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NOTE:  This is just my interpretation of the new GFE and I am only a mortgage originator and blogger. This post is just based on my opinion.   Please check with your compliance department at your mortgage company to learn about the GFE requirements.

This the last post in my series of four on comparing HUD’s new Good Faith Estimate to our existing GFE, which is retired on December 31, 2009.   I actually feel like I’m losing an old friend that I’ve relied on for years to help educate consumers.    HUD’s new GFE does not disclose the total monthly mortgage payment (PITI), seller closing costs credits or funds needed for closing.

This is a snapshot of the bottom portion of my current Good Faith Estimate which shows the total payment (upper left corner), closing costs summary and funds needed for closing.

Transactionsummary

HUD obviously feels this type of detail must be overwhelming to the average consumer.  But why total payment, seller closing costs credits and funds needed for closing are missing leaves me scratching my head.

Below is HUD’s summary of closing cost with the new Good Faith Estimate.

summarycharges

As compared to our “old” GFE (below) which clearly outlines the sales price, closing costs and prepaids, the seller credit of $7,500, credit to the buyer for their earnest money deposit of $1,500 and the financed upfront FHA mortgage insurance.   The buyer can also see the funds that are estimated to be due at closing on the purchase of their home.  

FundsNeeded

This is for the same transaction that I’ve been using throughout this series. 

Here is the closest thing you can find resembing a mortgage payment on the new GFE:

newpimi 

This figure above does not include property taxes or home owners insurance which will be included in the borrowers monthly mortgage payment.

Here’s a close up of the mortgage payment on my old GFE:

oldPITI

This actually shows the total mortgage payment and will factor in the monthly home owners association dues (even though it is not a part of the actual mortgage payment).

It’s a pity that PITI has been removed from the new GFE.

For more information about the new Good Faith Estimate, you can start reading HUD’s newly revised 49 page: Shopping for your Home Loan. The GFE review starts on page 11.

Hey home buyers and/or borrowers: which good faith estiamte do you preferred? HUD’s “new and improved” three page document with lump sum totals including closing costs you don’t pay for? Or the existing (for a few more days) GFE that resembles your estimated HUD that you’ll see at closing with details on the specfic closing costs, total monthly mortgage payment and funds due at closing?

New vs Old Good Faith Estimate Continued…

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NOTE:  This is just my interpretation of the new GFE and I am only a mortgage originator and blogger. This post is just based on my opinion.   Please check with your compliance department at your mortgage company to learn about the GFE requirements.

Previously, I reviewed page 1 of the 3 page good faith estimate which will be required for all residential mortgages effective with applications as of January 1, 2010.   We’re moving on to page 2 of the new good faith estimate and comparing it to the old Good Faith Estimate that I (and many) have used.

The current good faith estimate, which is to be retired at the end of this year, provides a line itemization of closing costs.  
ECC

Section 800 of the dear old good faith estimate for the most part contains what the new good faith estimate is now on page 2 of the HUD’s Good Faith Estimate.

What used to be line itemed in Section 800 of the old GFE is now for the most part, lumped together under “Your Adjusted Originated Charges” less third party fees. When you look at the current (soon to be retired GFE); I’m basing this on lines 801, plus lines 811 – 814 even if the seller is paying the fees…by the way, there is no place on the new Good Faith Estimate that shows the seller credit…but if you don’t disclose the funds for closing, I guess HUD feels that point is moot!

Block one of the Good Faith Estimate cannot change–once a GFE is issued, unless it qualifies for a “changed circumstance” or the GFE “expires”, the Mortgage Originator is bound.   A “changed circumstance” is not as easy as it sounds…and warrants a post of it’s own.   They must be documented on only the fee impacted by the changed circumstance is allowed to be modified.  Mortgage originators should be prepared for banks/lenders to balk at your explanation of the changed circumstance–expect to have to “eat the cost” difference if the bank doesn’t “buy it”.

Quick reminder, this post is just to compare a specific FHA scenario based on a current and the new GFE–so if a LO has discount points or YSP, this would look different and it will take a follow up post to review it.

The next section on the new GFE is “Your Charges for All Other Settlement Services“.

YourChargesforAllOtherSettlementServices

Block 3 of this section are items the lender selects and that the borrower cannot. Since this scenario is an FHA loan, it includes the FHA upfront mortgage insurance. This section is subject to the 10% tolerance in aggregate “bucket”. On my old GFE, comparing estimate to estimate, these specific fees would be found on lines 803, 809 and 902.

Block 4 is for the lenders title insurance policy and the escrow fee/settlement services. They’re now lumped together. It doesn’t matter if it’s the same company or not. If the borrower selects a provider from the list provided by the lender, it’s subject to the 10% tolerance. If the borrower deviates from the list, there is no limit to how much the fees can adjust. If the lender does not provide a list, there is zero tolerance from the good faith estimate to the HUD-1 Settlement Statement. I suspect that some big banks will use this to try to capture title or escrow business. On my old GFE, these fees were shown on lines 1101 and 1108.

Block 5 is a doozie. HUD does a great job contradicting themselves with whether or not the owners title insurance policy fee needs to be disclcosed here. In Washington State, this is typically a fee charged to the seller. Yet it really appears as though HUD wants this cost disclosed to the buyer EVEN IF THEY’RE NOT PAYING IT. This fee is not on the old GFE.

Block 7 are the recording fees and is shown in section 1200 of my GFE. Even recording fees that the seller typically pays may be disclosed here. This is shown in section 1200 of my old GFE.

Block 8 is for “excise tax” and it’s my understanding that the only county in our area where the buyer actually pays a portion of excise tax is San Juan County. If I’m wrong–please correct me!

Old/existing Good Faith Estimate below shows the items the lender requires to be paid in advance (prorated interest, 1 years home owners insurance for a purchase and the upfront FHA mortgage insurance) and the left and what is required to start the reserve account.  NOTE:  this is my personal GFE (generated from Encompass).

Reserves_Prepaids

Block 9 discloses what is charged to start your escrow reserve account (line 1001 and 1004 on my old GFE).

Block 10 is the prorated interest based on the day the loan is closing (line 901 of my old GFE).

Block 11 is the estimated (in this case) annual home owners insurance premium which is disclosed on line 903 of my old GFE.

If you add the “adjusted origination charges”  (Box A)  to the “your charges for all other settlement services” (Box B), you come up with a “total estimated settlement charges” (which also includes the owners title insurance policy which is not paid for by the buyer in these parts).    Again, this does not factor in any seller credit–the only credit factored into the new GFE is in the form of YSP (yield spread premium).

summarycharges

I’m going to miss you, Old Good Faith Estimate!   The two things home buyers ask most from the lender (after what’s your rate) is “how much is my payment going to be” and “how much money do we need for the down payment and closing costs”.   HUD’s new GFE answers neither.

New vs Old Good Faith Estimate

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NOTE:  This is just my interpretation of the new GFE and I am only a mortgage originator and blogger. This post is just based on my opinion.   Please check with your compliance department at your mortgage company to learn about the GFE requirements.

In a matter of days, all residential mortgage originators (we’re actually referred to as MLO’s now:  Mortgage Loan Originator) will have to adapt HUD’s new Good Faith Estimate…warts and all.   I promised Ardell that I would show her a comparison between the old and new GFE.   I won’t be covering everything line by line on HUD’s new page Good Faith Estimate–I’ve done that all ready…so some parts of this three page extravaganza may be missing from this post.

Page 1

Important Dates (click on image to for better viewing)

ImportantDates

This is a new feature to the good faith estimate.   GFE’s now have an expiration date if not acted upon by the borrower and certain costs are guaranteed for specific time periods.   Sounds great–EXCEPT I think you’ll find many MLO’s not willing to prepare a good faith estimate to the average “rate shopper” since HUD has spelled out that IF a good faith estimate is provided, it’s presumed that the mortgage originator has enough information to have a complete loan application.

In addition, line two states that MLO’s are held accountable for the third party closing costs they are using in their quote for 10 business days.   So if I rely on an escrow rate sheet from Tim’s company, and they happen to adjust upward during those 1o business days and the consumer decides to proceed with the rate quote, I could potentially be on the hook for the difference.   In reality, there is no way for a MLO to guarantee a third party fee unless they are willing to “eat the difference”.

Summary of your loan (click on image to for better viewing)

SummaryOfLoan2

This section gives you the basics of your loan.   For this estimate, I’m using an FHA loan and as I mentioned in my previous post, some of the details may be wrong.  For example, this references “initial loan amount”…as I write this post, I’m not 100% sure if this should be your base loan amount with an FHA loan or total loan amount (base plus the upfront mortgage insurance which may or may not be financed–perhaps that’s the fine detail: whether or not the borrower finances the FHA upfront mortgage insurance)…I’ve checked HUD’s FAQ’s (all 51 pages based on the latest update last month) and cannot see where this is addressed… anyhow… I went with base loan amount since other closing costs (such as origination fee) are factored off that figure.

Everything is pretty self explanitory…my issue with this section is the fourth line down:

“Your monthly mortgage amount owed for principal, interest, and any mortgage insurance is: $1648.31”  

This payment does not include taxes or insurance.  On the old/existing GFE, my clients actually see a total payment (PITI) of $2008.21.   PITI is gone on the new Good Faith Estimate…I don’t who’s bright idea at HUD this was…now we have PIMI:  principal + interest + mortgage insurance even though the borrower still makes the PITI payment.

Even the next section, escrow account  information, restates the “PIMI” where the GFE could have at least stated what the estimated escrow payment (real estate taxes insurance) would be so that consumers could add these two figures together to come to their actual mortgage payment…but no…that might make a bit of sense.

The bottom of page one refers to closing costs that are shown on page 2…which I will address on the next post.

Ring Out the Old, Ring in the New Good Faith Estimate

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Today between “actual work” Ardell and I were tweeting (on Twitter of course) about the new Good Faith Estimate.

ardell_001

During our dialogue, I offered to share a comparison of our exiting Good Faith Estimate, which we have around for loan applications effective ten more days before we are required to use HUD’s new  Good Faith Estimate.

ardellgfe

The new estimate is highly controversial and you may hard pressed to find many mortgage originators who like it.  I am for having an uniform document for consumers to use when selecting their mortgage–I don’t think this will do it.  I’ll get into more of that later (perhaps on another post if this one rambles too long).   Right off the bat, there are serious flaws with HUD’s attempt at improving the GFE:

  • There is no “total mortgage payment” or PITI (sum of principal, interest, taxes and insurance).  The closest thing we have PIMI (principal, interest and mortgage insurance).
  • There is no section for total funds due for closing.
  • There is no section for seller credit.
  • The owners title policy must be shown on the Good Faith Estimate even though in our area, it is customary for the seller to pay for it.
  • Loan originators who prepare a good faith estimate for a consumer are “presumed” to have obtained enough information for a loan application and are therefore bound by certain costs (including third party) for a specific time period.

This comparison is for a purchase using an FHA insured loan for financing.  I have to admit, I’m not 100% certain if the loan amount on the new GFE is suppose to be the base loan amount or the base loan amount plus the financed upfront mortgage insurance premium–I can’t find that addressed anywhere in HUDs 51 page FAQs on this new document.  I’ll correct this post if it turns out I’m wrong (I’m just using the base loan amount).

The new Good Faith Estimate consists of three pages, HUD added two additional pages even though this is suppose to streamline the process and make things easier for consumers to understand.   I’m not going over it line by line in this post, I am going to review what I feel is most important…and I’ve just decided this will be series (since I can see I’ve all ready rambled too long).

Watch for part 2 where I cover page 1 of HUD’s new Good Faith Estimate…coming soon–January 1, 2010!

NOTE:  This is just my interpretation of the new GFE and I am only a mortgage originator and blogger. This post is just based on my opinion.   Please check with your compliance department at your mortgage company to learn about the GFE requirements.

Will Banks Cash In on the New Good Faith Estimate

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The new Good Faith Estimate will be required to be used on all new loan applications effective January 1, 2010.   Part of HUD’s GFE may include a service provider list which consists of title and escrow/settlement providers (boxes 4, 5 and 6; section b on page 2 of the GFE).  This list (if permitted by the lender) is important to the consumer as it will determine what the cost difference can be between the good faith estimate and the settlement statement at closing.  

hudboxes3thru6

If a borrower relies on a service provider (title and escrow/settlement services) on the list given to them by their mortgage originator with the good faith estimate, there is a 10% tolerance.  This means that if the cost at closing comes in more than 10% higher of the sum of those fees than what was provided on the good faith estimate, the lender will pay the difference (or credit the borrower) over the 10% sum of those fees.   However if the lender permits and the borrower to shop for their own title and/or escrow vendor, the loan originator is “off the hook” should the fees come in higher at closing.

Per HUD “if no service providers are listed, then it is assumed the customer could not shop and fees will be bound by the tolerances” and that “lenders are responsible for fee requirements listed by their loan officers or the broker”.     

If the lender “permits” the borrower to shop for title and escrow services, they must provide this written list which must include at least one service provider on a separate sheet of paper and then the lender is subject to the 10% tolerance (based on the aggregate of those fees).

I see this as a huge opportunity for the banks similar to what we’ve witnessed with HVCC.   This is their big chance to control where escrow and title go–to them!    Banks will state that they do not want to risk being off on their quotes with new binding good faith estimates and it’s my belief they will do their best to keep escrow and/or title “in house” or affiliated providers.    Some mortgage brokers may find that they will have to use the banks preferred title and escrow vendors just as they do the banks appraisal management companies.     Should this happen, we may see banks use low cost centralized services, similar to many bank processing centers (some are even located out of state).

How will borrowers know how to select or shop for a title and/or escrow company?   Can they rely on their bank loan originator to help them select a title or escrow provider when the MLO (Mortgage Loan Originator) is directed to only have the bank’s providers on the list?    The new RESPA laws will not allow MLOs to recommend anyone who is not on the service provider list.    Should the consumer rely on their real estate agent to recommend the title and escrow provider (many brokerages have joint venture relationships)?

With a purchase, if the title and/or escrow service providers are other than those designated on the written service provider list, then it is presumed that the buyer/borrower selected those providers (even if it was directed by the real estate agents or seller) since the buyer agreed to the contract.   With this scenario, the lender is not subject to the 10% tolerance in fees for those costs.    Buyers may find a surprise comparing the good faith estimate at signing to the HUD Settlement Statment if the title and/or escrow company are different from what was designated on the purchase and sales agreement.

The new Good Faith Estimate may wind up being a huge set back for independent escrow companies and smaller independent title agencies who will most likely lose any relationships they have forged with loan originators who happen to work for one of the big banks.

By the way, if you are planning on selecting your escrow and/or title provider.  You may want to start researching prior to your prequalification process with the mortgage originator.   You may find that effective January 1, 2010 most mortgage originators will not want to provide a good faith estimate until you have committed to working with them as the new GFE’s are binding for the loan originator unless certain “changed circumstances” permit the MLO to issue a revised estimate.  Per HUD:

“If a GFE is given during prequalification, the receipt of one of the six required pieces of documentation will not constitute a “changed circumstance.”

The loan originator is presumed by HUD to have the “six required pieces of documentation” if they issue a good faith estimate.

…I’ll be writing more about this on a future post.

How Does a Short Sale or Foreclosure Impact Your Credit

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Ardell posed a question on her last post about credit scoring that I’ve been meaning to address here at Rain City Guide on how credit scores are impacted by short sales or foreclosure.    When I was speaking at the Mortgage Girlfriends Mastermind Retreat in Scottsdale this summer, I had the opportunity to meet Linda Ferrari, a well known credit expert and author of “The Big Score – Getting It and Keeping It” (a book I highly recommend everyone read).   

According to Linda, “a foreclosure can drop a credit score 50-250 points (this includes points all ready lost to delinquent payments).   The difference in point loss depends on how many points someone has to lose in the payment history factor of his or her credit report.   Thus is someone has a 750 credit score and they opt to foreclose, their score could drop 250 points.  However if someone has a 500 credit score, they may only lose 50 points for the same derogatory.”

It hardly seems fair to me that someone who has established excellent credit and they are faced with a huge financial hardship, they’re penalized on a greater scale simply because they have “more to lose” (reminds me of our income tax system)!   With a foreclosure, you can expect to wait about 5-7 years to purchase your next home (based on current guidelines) assuming a mid-credit score of 680 and a 10% down payment for conventional financing.  

A deed in lieu of foreclosure may impact credit scores the same as a foreclosure depending on how it is reported to the credit bureaus–they don’t have to report it as a foreclosure…if they do, the credit will be scored as such.    Here’s what Linda recommends you try negotiating how the deed in lieu is reported on your credit with the lender in preferred order:

  • Paid As Agreed.  Credit scores will have already dropped over 100 points due to default in payments; however, if reported as Paid As Agreed, the borrower will be able to purchase another home in a shorter time period.
  • Paid Settlement.  Credit scores could drop 75-100 points in addition to the points already lost for delinquent payments.
  • Foreclosure.  Credit scores could drop 100-150 points in addition to the points already lost for delinquent payments.

    • One advantage of a deed in lieu of foreclsoure is you may be able to purchase a home, if you so desire, a minimum four years afterwards with 10% down payment, based on current guidelines.  

    A short sale is potentially the least damaging to your credit scores assuming you’ve been able to make mortgage payments on time.   According to Linda, credit scores may drop from 50-150 points (depending on what else is going on with your mortgage and credit history).    You may also be able to buy a home quicker using this route.   Linda Ferrari writes on her blog why you may not want to consider using a short sale as an option should you be in financial distress.  

    FHA may allow borrowers who have lost a home due to short sale, deed in lieu or foreclosure a little quicker than conventional financing–around three years depending on various factors.   Extreme extenuating circumstances may allow for a shorter time period.   Again, this is current guidelines.  I wouldn’t be one bit surprised to see FHA change this guideline to be more in line with conventional financing.

    You have to keep in mind that credit scoring is accumulative, everything is factored to come up with those three scores that are suppose to reflect your current credit.   The only real good news about credit scoring is that your scores are temporary–they are changing constantly.  Pay down a credit card, establish good payment history on your installment loan and your scores will improve over time.

    Hug Your Escrow Officer and Funder Day

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    hugThe original expiration date of the first time home buyer tax credit is today.   This means that escrow companies, title companies, funders at mortgage companies, courthouse runners, the county recording clerks and anyone else who is involved in the final process of a real estate transaction are very busy today due to the increased volume.   I expect receiving recording numbers to take bit longer than usual.

    I hereby declare today, November 30, 2009 National Hug Your Escrow Officer and Funder Day.   Give ’em a break and show extra compassion and patience for the what they may be experiencing today.  

    Perhaps this should be an annual (if not daily) event.

    Hugs!  🙂

    Subject: Need Your Help…Making Home Affordable Program

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    I get a lot of emails from people who are looking for some help with their mortgage needs from the articles I write here and on my mortgage blog.   I just heard back from a reader today who I’ve been having an email dialogue with since March.  He contacted me after reading a post I had written with the subject line:  “Need Your Help…Making Home Affordable Program”.   I asked him today if I could share the emails so our readers can see what it has been like for this homeowner trying to get a HARP refi.  

    March 8, 2009  

    I read your post and I’m very excited.  I am a novice when it comes to mortgage so please help me understand this.  I bought my house 4 years ago and the values have dropped.  I have two mortgages 80% and 20% with the same lender.  I am currently paying around 42% of my gross income.  

    My understanding is that only the first mortgage will be lowered down?  Both of my mortgages are with the same lender [very large bank].  I will call them on Monday but need to hear from you as I trust your opinion more.  What will happen to my other 20% loan, it’s at 7%.  Please help….

    I provide the toll free number and contact information for his bank.  With two mortgages at 100% or higher loan to value, it’s pretty challenging to help anyone.  Second mortgages have become more difficult than ever–even with short sale negotiations.    I suggested that he contact his bank/mortgage servicer since they have both mortgages with hopes they would maybe modify his loan if it did not qualify for the refi.

    March 9, 2009

    Thank you for your support, it means a lot to me.  I was on hold with the bank for no avail.  I will try again tomorrow.  I guess they’re receiving too many calls these days.

    I replied:  I’m sure they’re inundated…they did a lot of second mortgage/home equity loans up to 100% loan-to-value.

    March 10, 2009

    I was able to get hold of them this morning at 5:00 a.m. (they open at 8 EST).  The good news is that my first mortgage is with Fannie Mae…they would not discuss options with me until I fill out their paperwork.  Thanks for all of your help.

    I told him I was glad and asked him to keep me informed of his progress.   He immediately replied:

    Sure, I will keep you posted.  I will be submitting my application by this Friday  🙂

    I didn’t hear from him again until today.

    Hi.  I hope everything is going well for you.  I just wanted to update you regarding my application.   Well, the bank denied my application citing that my monthly payments on my first, including insurance, property taxes and HOA is not 37% of my monthly gross income.   When I argued that the program says 31%, their rebuttal is that they us a sliding scale based on income.  I’m not sure if this is what the program guidelines say or is it just something the bank came up with on their own.   I just wanted to thank you for your help through this effort.

    There are a lot of stats thrown to the press about how great HARP is and how many people have been helped.   There are many who have not been so lucky and have had to go through hoops to find out.

    Has any home owner had success dealing with their second mortgage with a Home Affordable refinance or loan mod program?

    Fannie Mae Announces Deed for Lease Program

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    In a press release this morning, Fannie Mae announced a new program for homeowners who are facing foreclosure and who do not qualify for a loan modification:  Deed for Lease.  Distressed homeowners would complete a deed in lieu of foreclosure back to the lender anad then rent their home from the lender at market rate.   Leases may be up to 12 months followed with a month to month option.  

    Jay Ryan, Vice President of Fannie Mae says:

    “This new program helps eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period, and helps to stabilize neighborhoods and communities.” 

      For homeowners to qualify for the Deed for Lease Program:

    • The home must be occupied as a primary residence.  Investment properties may be eligibile as long as there is a tenant occupying the propert and willing to participate in the Deed for Lease Program.  
    • This program is not available for second homes or vacation homes.
    • Available for 1-4 unit properties where Fannie Mae owns the mortgage (not available for government guaranteed or insured loans: FHA, HUD, VA, USDA).
    • Second mortgages/liens on the property are not allowed;
    • Borrower/tenant must be able to document that the new lease payment does not exceed 31% of their gross monthly income.
    • At least three mortgage payments must have been made since the last origination/loan modification.
    • Borrower may not be more than 12 months past due on the mortgage.
    • Borrower/tenant may not be actively involved in a bankruptcy.
    • Rental insurance may be required if there are pets.  (You probably want rental insurance regardless).
    • Borrower/tenant will need to pay a lease application fee of $75 fee per unit.

    I’m wondering if this will be considered a taxable sale — will there be excise tax due?   A title insurance policy will be required to prove the title is “marketable”.    The properties will be inspected to make sure the occupants have kept the home in good condition and to permit the marketing of the property for sale.  I would hope that the Deed for Lease tennant would have the first right to re-purchase their home during the 12 month period.   According to Fannie Mae’s announcement: 

    “A Deed for Lease property that is subsequently sold includes an assignment of the lease to the buyer.”  

    Homeowners will need to work directly with their mortgage servicer (who they make their mortgage payment to) in order to see if they qualify.  According to Fannie Mae, mortgage servicers can offer this program immediately–however, you can bet it may take a while for this program to become available.   Fannie Mae offers these instructions for homeowners who are considering this program.

    I’m wondering if there is excise tax due on the sale of the property to the lender.

    The intent of the program, which I applaud, is: 

    “to minimize family displacement, deterioration of neighborhoods caused by vandalism and theft to vacant homes, and the effect these have on families, communities and home price stabilization”.  

    I’m sure we all have abanoned homes in our neighborhoods and know families who have lost their homes.   Hopefully this will help make things a little better for all while our housing industry and our economy is trying to recover.