The Department of Housing and Urban Development could refinance distressed subprime borrowers into more affordable Federal Housing Administration loans in a prudent way that would not be a "bailout" for the lenders, according to the National Association of Realtors.The NAR is urging HUD to waive an underwriting requirement so the FHA can refinance borrowers who are behind on their adjustable-rate 2/28 and 3/27 mortgage payments. It is understood that the original lender would forgive a significant amount of the loan so the FHA can refinance at a 97% loan-to-value ratio reflecting the current appraised value of the property. "This would not be a bailout for lenders since they would incur significant losses," NAR president Pat Combs says in a letter to HUD Secretary Alphonso Jackson. Lenders generally lose $20,000 to $40,000 in a foreclosure. Mortgage banking consultant Brian Chappelle said there would be considerable lender interest in this program if it were implemented. A HUD official said the department has no comment at this time. "We believe FHA can design a mechanism where creditworthy borrowers could refinance subject to prudent guidelines and therefore avoid losing their homes," Ms. Combs said. The NAR can be found online at http://www.realtor.org.
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A federal judge in Texas dismissed the Consumer Financial Protection Bureau's medical debt rule and prohibited states from passing their own laws prohibiting medical debt on credit reports.
5h ago -
Dr. Mark Calabria takes on the additional role of chief statistician of the United States; retired Ally Bank executive Diane Morais has joined First Citizens Bancshares' board of directors; MainStreet Bank has promoted Alex Vari to chief financial officer; and more in this week's banking news roundup.
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While refinances are behind the latest increases, the pace of purchase activity may be a stronger indicator of where the housing market sits.
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The share of economists expecting a September rate reduction grew in the July Wolters Kluwer survey, but the October or later percentage also increased.
10h ago -
Rising home prices and softening sales offer a mixed view of a market that some say is shifting to favor buyers.
11h ago -
The notes are backed by home improvement installment loans originated by approved dealers in Foundation Finance Company's network.
11h ago