Economic Perspectives with Hopeton Hay on KAZI 88.7 FM in Austin, TX

Archive for the ‘Mortgages’ Category

BCL of Texas Helping Homeowners with Emergency Loan Program

Posted by Hopeton on July 13, 2011

BCL of Texas is operating the U.S. Department of Housing and Urban Development’s Emergency Homeowners Loan Program for central Texas and other areas in Texas.  EHLP was created to help homeowners who are temporarily and involuntarily unemployed or underemployed due to economic conditions or a medical condition, and are at risk of foreclosure. The EHLP will provide eligible homeowners with emergency assistance that pays a portion of their monthly mortgage payment for up to twenty-four consecutive months, or up to $50,000, whichever occurs first. To be eligible applicants must complete the pre-applicant screening worksheet by July 22. For more information go to http://www.ehlptexas.org/ or call 877-417-8272. 

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Emergency Homeowners Loan Program and Advocacy of Ideas Focus of July 10 Economic Perspectives

Posted by Hopeton on July 7, 2011

Raquel Valdez, manager of the Emergency Homeowners Loan Program for BCL of Texas, and John Daly, author of Advocacy: Championing Ideas and Influencing Others, are the guest for the two segments of  the July 10 edition of Economic Perspectives, 5:30 p.m.-6 p.m. central time on KAZI 88.7 FM.  Listen live online at kazifm.org.

Raquel Valdez, Emergency Homeowners Loan Program

EHLP is designed to provide mortgage payment relief to eligible homeowners experiencing a decrease in income of at least 15%directly resulting from involuntary unemployment or underemployment due to adverse economic conditions and/or a medical emergency. The deadline for pre-applicant eligibility screening is July 22.

Raquel Valdez

Some of the eligibility requirements include;

a. Own fee simple title to the mortgaged property; property must be a single-family (1-4 unit), condominium, cooperative or manufactured home that is secured by a mortgage.

b. Involuntary unemployment or underemployment due to the economy or a medical condition

c. Current income at least 15% less than it was in 2009.

d. At least 90 days delinquent on your mortgage.

For more information on eligibility for the program click here.

John Daly, Advocacy

When a group of people gather together to generate ideas for solving a problem or achieving a goal, sometimes the best ideas are passed over. Worse, a problematic suggestion with far less likelihood of success may be selected instead. Why would a group dismiss an option that would be more effective? Leadership and communications expert John Daly has a straightforward answer: it wasn’t sold to them as well. If the best idea is yours, how can you increase the chances that it gains the support of the group? In Advocacy: Championing Ideas and Influencing Others, Daly explains in full detail how to transform ideas into practice.

Dr. Daly is a professor in the College of Communications and McCombs School of Business at The University of Texas at Austin.  He has worked with more than 300 public agencies and private organizations around the world in consulting, training and speaking roles including 3M, Apple Computers, Dell Computers, Goldman Sachs, and Home Depot.

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Help for Homeowners Behind on Mortgage

Posted by Hopeton on July 5, 2011

The U.S. Department of Housing and Urban Development (HUD) has a new program to help homeowners prevent foreclosure. The Emergency Homeowners’ Loan Program (EHLP) provides mortgage payment assistance to eligible homeowners who have lost a job or are underemployed due to the economy or a medical condition resulting in a drop in income of at least 15%.

The mortgage assistance covers past-due mortgage payments, as well as a portion of the homeowner’s mortgage payment for up to 24 months (up to $50,000). The application deadline is July 22, 2011.

Interested homeowners can find more information by visiting http://www.findEHLP.org or by calling the toll-free EHLP hotline at 855-346-3345.

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The Challenges Facing Fannie Mae and Freddie Mac Focus of April 25 Economic Perspectives

Posted by Hopeton on April 25, 2011

Stijn Van Nieuwerburgh, co-author of Guaranteed to Fail: Fannie Mae, Freddie Mac, and the Debacle of Mortgage Finance will be a guest on Economic Perspectives today at 5:30 p.m. central time. Stacy Dukes-Rhone, executive director of BiGAustin, will also be a guest and will discuss BiG Idea Day which is on April 29. Listen live online at kazifm.org.

Guaranteed to Fail opines how “poorly designed government guarantees” for Fannie Mae and Freddie Mac led to the debacle of mortgage finance in the United States, weighs different reform proposals, and provides recommendations. This book unravels the dizzyingly immense, highly interconnected businesses of Fannie and Freddie. It proposes a model of reform that emphasizes public-private partnership, one that can serve as a blueprint for better organizing and managing government-sponsored enterprises like Fannie Mae and Freddie Mac. In doing so, Guaranteed to Fail strikes a cautionary note about excessive government intervention in markets.

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Twelve-Steps to Financial Success in 2012

Posted by Hopeton on December 29, 2010

The following tips were provided by the National Foundation for Credit Counseling:

  1. Review your credit report – Much of your financial future depends on the contents of your credit report. Therefore, your first step should be to obtain your report, review it for accuracy and dispute any errors.  Since you can access your credit report free of charge, there is no reason to neglect this important piece of your financial life.  Consumers are allowed one free report from each of the three major bureaus once every twelve months.  You can get all three at once, which is a good idea if a major purchase is on the horizon, or stagger your requests to check for identity theft.  Access your report from www.annualcreditreport.com.
  2. Obtain your credit score – The three digits that comprise your credit score are a major dictator of whether or not the lender will extend credit, and at what interest rate.  It is likely that you’ll have to pay to purchase your score, but it will be money well-spent.  Be sure to understand the range within which your score falls, as each score has its own scale.  Further, take the necessary steps to improve your score.  Remember, a high score equals a low interest rate, saving you significant money over time.
  3. Reduce debt – If you’ve dug a deep financial hole, stop digging.  Piling new debt on top of old is a red flag that you are living beyond your means. Lock up the credit cards until they’re paid in full, and meanwhile, reach out for help from a legitimate credit counseling agency sooner rather than later.  Delaying only makes the problem worse.
  4. Commit to save – Americans are great spenders and lousy savers.  Without a well-funded savings account, you are on a very slippery slope, one that becomes treacherous with the next unplanned expense.  Put 10 percent of each take-home check into a savings account.  Find extra money to dedicate to saving by putting all raises, bonuses, birthday checks, and any other windfall monies into savings. This will create a cushion that should see you through most short-term emergencies.
  5. Get financially organized – Create your own personal financial center where you can instantly put your hands on your family’s financial records.  Your center doesn’t have to be a fancy home office.  It could be an accordion folder.  The point is that you know where everything is.  Place original documents such as a will or your mortgage in a safe deposit box, and keep a copy at home.
  6. Avoid incurring late fees – Pay your bills the day you receive them. This way you’ll never risk the creditor receiving your payment after the due date. Delaying could result in you being charged a late fee, a ding to your credit report and a lower credit score.  The risk of delay is simply too great.  If you travel for work or are a procrastinator, consider setting up online bill pay with payments large enough to cover at least the minimum amount due.
  7. Avoid paying overdraft fees – A receipt stuffed into your car visor isn’t simply being unorganized.  It can cost you. Many an account has been overdrawn due to neglecting to notate an ATM withdrawal or debit purchase.  Get into the habit of recording each transaction into your check register on the spot.  Also take the time to balance your checkbook each week, and reconcile your bank statement each month.
  8. Track your spending for 30 days – Have everyone in the household who spends money participate in this exercise.  Write down every cent that is spent, as it’s the small, miscellaneous expenses that often wreck the best of plans. At the end of the month, come together to review the spending.   This is the only way you can truly know where your hard-earned money is going.
  9. Create a spending plan you can live with – Once you’ve tracked your spending, you can then make conscious decisions as to how you want to allocate the money.  Continue tracking with the new plan in place.  Keep doing so until you find a plan that is right for your family.  Make it too strict, and no one will stay on board.  Make it too lenient and you won’t be accomplishing anything.
  10. Take advantage of free money – Contribute the maximum amount to your retirement plan at work, or at the very least, meet the matched amount or you’re throwing away free money.  Also inquire about the availability of Flexible Spending Accounts or Health Savings Accounts.  All of the above can lower your taxable income.
  11. Have an annual insurance check-up – No one wants to be over-insured.  Nor do you want to be under-insured resulting in an unpleasant surprise when making a claim.   Make an appointment with your provider and confirm that your coverage is exactly what you thought you were paying for.  Inquire about ways to lower your premiums, and ask about any discounts for loyalty, good driving and the bundling of multiple polices.
  12. Investigate refinancing your mortgage – Even though rates of late have been rising, they are still very low, potentially saving you significant money over the life of your loan.  There are multiple online calculators that can help you evaluate the options.  Do not extend the term of your loan, however, in order to get a lower monthly payment unless this is absolutely necessary to stay afloat.

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Congressional Oversight Panel Examines Mortgage Irregularities

Posted by Hopeton on November 16, 2010

The following was released by the press office of the Congressional Oversight Panel.

The Congressional Oversight Panel today released its November oversight report, “Examining the Consequences of Mortgage Irregularities for Financial Stability and Foreclosure Mitigation.” The Panel reviewed allegations that companies servicing $6.4 trillion in American mortgages may in some cases have bypassed legally required steps to foreclose on a home. The implications of these irregularities remain unclear, but it is possible that “robo-signing” may have concealed deeper problems in the mortgage market that could potentially threaten financial stability and undermine foreclosure prevention efforts.

In the best-case scenario, concerns about mortgage documentation irregularities may prove overblown. In this view, which has been embraced by the financial industry, a handful of employees failed to follow procedures in signing foreclosure-related affidavits, but the facts underlying the affidavits are demonstrably accurate. Foreclosures could proceed as soon as the invalid affidavits are replaced with properly executed paperwork.

The worst-case scenario is considerably grimmer. In this view, which has been articulated by academics and homeowner advocates, the “robo-signing” of affidavits served to cover up the fact that loan servicers cannot demonstrate the facts required to conduct a lawful foreclosure. The risk stems from the possibility that the rapid growth of mortgage securitization in recent years may have outpaced the ability of the legal and financial system to track mortgage loan ownership. In essence, banks may be unable to prove that they own the mortgage loans they claim to own.

If documentation problems prove to be pervasive and throw into doubt the ownership of pooled mortgages, the consequences could be severe. Borrowers may be unable to determine whether they are sending their monthly payments to the right people. Judges may block any effort to foreclose, even in cases where borrowers have failed to make regular payments. Multiple banks may attempt to foreclose upon the same property. Borrowers who have already suffered foreclosure may seek to regain title to their homes and force any new owners to move out. Would-be buyers and sellers could find themselves in limbo, unable to know with any certainty whether they can safely buy or sell a home.

Further wide-scale disruptions in the housing market, if they arose, could cause significant harm to financial institutions. For example, if a Wall Street bank were to discover that, due to shoddily executed paperwork, it still owns millions of defaulted mortgages that it thought it sold off years ago, it could face billions of dollars in unexpected losses. To put in perspective the potential problem, the mortgage-backed securities market totals approximately $7.6 trillion, so irregularities that affect even a small percentage of this market could have dramatic effects on bank balance sheets – potentially posing risks to the very financial stability that the Troubled Asset Relief Program was designed to protect. The Panel urges Treasury and bank regulators to undertake new “stress tests” to gauge the ability of major financial institutions to cope with a potential documentation-related crisis.

Documentation irregularities could also disrupt Treasury’s foreclosure prevention efforts. Some servicers dealing with Treasury may not be able to document a legal right to initiate foreclosures, which may call into question their ability to grant modifications or to demand payments from homeowners. The servicers’ use of “robo-signing” may also have affected determinations about individual loans; servicers may have been more willing to foreclose if they were not bearing the full costs of a properly executed foreclosure. The Panel recommends that Treasury immediately undertake more active efforts to monitor the impact of documentation irregularities on its foreclosure mitigation programs.

Documentation irregularities could compound other threats to the mortgage market. In particular, allegations have surfaced that banks may have misrepresented the quality of many loans sold for securitization. Banks found to have provided misrepresentations could be required to repurchase any affected mortgages. Because millions of these mortgages are in default or foreclosure, the result could be extensive capital losses if such repurchase risk is not adequately reserved.

The Panel emphasizes that mortgage lenders and securitization servicers should not undertake to foreclose on any homeowner unless they are able to do so in full compliance with applicable laws and their contractual agreements with the homeowner.

The full report is available at www.cop.senate.gov.

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