Unemployed borrowers could qualify for forbearance on their mortgages starting in July. UP is designed to reduce or suspend mortgage payments for at least 3 months or to reemployment, whichever period of time is less. However, servicers can extend the period of forbearance according to their own guidelines.
Monthly mortgage payments can be reduced to less than or equal to 31% of gross monthly income, or they can be suspended entirely.
To be eligible for UP, a homeowner must:
· Meet HAMP eligibility criteria
· Be unemployed
· Receive unemployment benefits in the month of their UP effective date
· Request UP forbearance before they miss 3 monthly mortgage payments
Servicers can require borrowers to have been receiving unemployment for 3 months before the start of the forbearance plan if they wish, and unemployed borrowers requesting HAMP assistance must be evaluated for the UP plan before they can enter the HAMP system. Upon the expiration of forbearance or reemployment, borrowers will automatically be evaluated for HAMP modification of their loan.
At this time, UP cannot be applied to government-owned loans. Very curious, huh?
Thank you for reading the Bryan Ellis Real Estate Letter – your comments and questions are welcomed and encouraged!
I’m hearing a lot about what the government is doing to hurt investors, though I’m not hearing much about the lack of government intervention to stop price fixing by banks and appraisers. This kills flippers’ profits (which obviously are 100% legitimate) and is artificially keeping home prices down. This hurts everyone.
If the values were allowed to rise it would help the consumer confidence. This would cause more people to enter the market and others to possibly continuing making their payments as they see themselves less and less underwater. If the government wishes to intervene for the “good of the people” then they should look at everything that is going on. Myself and fellow flippers have lost a lot of profit (I don’t even want to count it up) because of appraisers slashing our values. If we have a valid contract and deal as a whole, then we shouldn’t have our values cut arbitrarily with no recourse.
Question: What would you consider the best way to address the appraisal-slashing that is going on. Obviously the appraisers are feeling or being pressured to slash appraisals or it wouldn’t be so rampant and blatantly obvious.
Thank you
Thanks for the heads up Bryan. Sounds typical government using a
hemeroid for brains again.
Best of Everything,
Mel
With most unemployment packages going 99 weeks(!!), 3 months is a drop in the bucket and just another short-term drag out.
Even if the servicer was “nice enough” to allow things to continue, and said homeowner *found* a job, the missed payments are likely tacked on to the end of the loan, the length now stretched out, and payments either rise to allocate the missed amount, or said note makes more money now from the added interest…
The government seems to be one sided in their programs. Help the those who over extended themselves, while those who have been prudent in controlling their debt and real estate purchases are in essence being penalized for paying their debt.
I feel that the unemployment payment program prevents people from wanting to work. Why should they try to work if the government will give you weekly paychecks without working for anywhere from 1 month to 12 months. This is counter-productive and will not get our country growing again. But, if the unemployed were to get a short term or lower paying job, they know that amount will be deducted from their unemployment check, so why even try to work, when they will not make any more money. People have lost the need for personal pride and the responsibility of providing for themselves, many feel that the government should take care of them regardless. That is why I feel we are in this situation now. People need to regain their pride of ethical work and be energetic in finding work period. As the saying goes, “If you want to work, there is always work to be done”. People need to change their attitude about work.
Robbrant76, or maybe the prices are coming closer to parity and the appraisers are being more honest in the valuation. One thing I have learned from being married to an appraiser is the value is always too high or too low, just depends which side you are on.
The truth as I have seen it over the years is most appraisers have little idea what a piece is worth and the realtor, sellers, and buyers have even less idea what it is worth.
One needs to understand what an appraisal is, just an educated guess at what the house might sell for on the day of the appraisal, nothing more, nothing less. So when the market heads down the appraisals head down, when the market heads up the appraisals head up. The person/company paying for the appraisal gets the benefit of doubt and everyone else bitches about the appraisal.
If you are consistently being “slashed’ on your values as you put it, your values are probably too high. If they are correct then people will buy at your value and not have a problem with it. If the loan company is always having a problem with the value, then be the bank, do a lease option, and pocket the difference. If you are worried about them not making the payment at the price you are selling at then maybe you know something the lenders figured out about what you are attempting to sell to the buyer.
The reason values are having a hard time rising is very easy to figure out, 9.9 official unemployment, much higher actual unemployment, too much government spending, inflation just around the corner, too many new government regulations, foreclosure at record levels and rising. Fannie and Freddie at the center of a very large corruption deal, with almost no press or attempts at dealing with the issue. Why would any of this bring about higher housing values? Where is the conspiracy to keep values low?
Keep up with the news here and abroad and you will see the housing market is not likely to make any one happy for a number of years. There is money to be made and deals to be had but one has to really think about the who, what and why to make it all happen.
Maybe I miss understand this but the free market determines the
value of any property at a given time and prices fluctuate according to current market conditions. Home prices reflect what a buyer is willing to pay nothing more and nothing less. It is very easy to say a home is worth a million dollars but unless a buyer is willing to pay that price, what you have is what you think it is worth and not actual cash value. This is the same across all asset classes, prices fluctuate always have always will! The problem is everybody always wants more, never less for his product goods or service and complains when they don’t get what they want. It is the unrelenting me first attitude of all involved that has gotten us to where we are today. This combined with the governments insidious decision to takes us off of the gold standard in favor up fabricated paper assets has created and will continue to create this complicated myriad of never ending problems! No one complained when people who payed 100k for their homes latter sold them for 400k or more where was the outrage and outcry then! So spare me if you find yourself on the wrong side of market forces and make the hard choices to improve your situation which is all of us can do anyway! Talk
is cheap focused intense correct action produces good results!