Senate Moves to Reinstate Higher Conforming Loan Limits

In an important victory for NAHB, the Senate on Oct. 20 approved an amendment to an appropriations bill offered by Sens. Bob Menendez (D-N.J.) and Johnny Isakson (R-Ga.) to reinstate for another two years the higher loan limits for Fannie Mae, Freddie Mac and the Federal Housing Administration that expired on Sept. 30.

The vote was 60 to 38, just meeting the necessary 60-vote threshold required for passage under Senate rules.

The appropriations bill includes spending for the Department of Housing and Urban Development and other federal agencies.

NAHB has been aggressively lobbying for the Menendez-Isakson amendment directly on Capitol Hill and through its grassroots membership.

A “key vote” letter was sent to members of the Senate on Oct. 19 urging them to support the amendment to spending bill H.R. 2112 to temporarily restore the higher conforming loan limits.

The letter noted that the current lower loan limits will “further restrict overall mortgage liquidity in the marketplace and place further downward pressure on home prices. Restoring the higher loan limits will provide home owners and home buyers with safe and affordable financing while providing a much-needed boost to housing markets all around the country.”

To build support for the amendment, NAHB also sent out a BuilderLink Alert notifying association members that the Senate might consider a measure to reinstate the higher conforming loan limits.

Members were urged to contact their senators and call on them to support the Menendez-Isakson amendment.

Effective on Oct. 1, the loan limits reverted to the lower levels for high-cost areas established under the Housing and Economic Recovery Act of 2008. The national ceiling for mortgages securitized by Fannie Mae and Freddie Mac or insured by the FHA dropped from $729,750 to $625,500 and the formula for establishing area loan limits became more restrictive, producing decreases for areas in addition to those currently bound by the national ceiling.

A recent NAHB study found that allowing the limits to revert to 2008 levels would make millions of home purchases ineligible for Fannie Mae, Freddie Mac and FHA funding and require them to be financed with higher mortgages interest rates, fees and downpayments and more stringent credit standards.

After passage of the Menendez-Isakson amendment, NAHB Chairman Bob Nielsen issued a statementcommending the Senate action and noting that “the 60-to-38 vote demonstrates bipartisan support for pro-housing policies that will help our industry to create jobs and spur economic growth.”

He also called on Congress to move soon to ensure that this measure is enacted into law.

“Otherwise,” said Nielsen, “the current drop in mortgage loan limits will reduce housing demand and place downward pressure on home prices in major markets. This will exacerbate the current housing downturn, trigger more foreclosures, impede job growth and endanger the fragile economic recovery.” 

As the appropriations process moves forward, NAHB will turn its focus to preserving the loan limits extension, among other priorities, in the HUD appropriations bill.

To view the legislation, click here and type bill number H.R. 2112 in the box in the center screen.

For more information, email Scott Meyer at NAHB, or call him at 800-368-5242 x8144.

This Article reposted with permission from the NAHB.

HARP Phase II Announced to Rescue Underwater Mortgages

The Federal Housing Finance Agency (FHFA), along with Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs), has announced a series of changes to the Home Affordable Refinance Program (HARP) in an effort to attract more eligible borrowers who can benefit from refinancing their mortgage. Dubbed Harp Phase II, the program enhancements were developed at the direction of the FHFA, with input from lenders, mortgage insurers and other industry participants.

“We know that there are many homeowners who are eligible to refinance under HARP and those are the borrowers we want to reach,” said FHFA Acting Director Edward J. DeMarco. “Building on the industry’s experience with HARP over the last two years, we have identified several changes that will make the program accessible to more borrowers with mortgages owned or guaranteed by the GSEs. Our goal in pursuing these changes is to create refinancing opportunities for these borrowers, while reducing risk for Fannie Mae and Freddie Mac and bringing a measure of stability to housing markets.”

Mark Zandi, chief economist at Moody’s Analytics, has estimated that the new plan could help an additional 1.6 million homeowners refinance by the end of 2013. By refinancing at today’s low rates, the average homeowner–with a $150,000 loan–could save approximately $1,600 a year according to Zandi.

"The mortgage industry welcomes these changes designed to help more underwater borrowers who are current on their mortgages refinance at today's historically low interest rates," said David H. Stevens, president and chief executive officer of the Mortgage Bankers Association (MBA). "Not only will these changes allow more borrowers to qualify, but they will streamline the process and reduce the cost to borrowers and should lessen risk for Fannie Mae and Freddie Mac. Lenders are particularly gratified that the refinements will provide relief from some representations and warranties that lenders face when originating new loans. These changes alone should encourage lenders to more actively participate in HARP."

To date, Fannie Mae and Freddie Mac have helped approximately nine million families refinance into a lower cost or more sustainable mortgage product, approximately 10 percent of those via HARP. The HARP program will continue to be available to borrowers with loans sold to the GSEs on or before May 31, 2009 with current loan-to-value (LTV) ratios above 80 percent.

“These enhancements will not only help responsible homeowners who have been unable to refinance because the equity in their home has disappeared, but it will also help spur the economy by allowing homeowners to reduce their monthly payment, thus allowing homeowners to spend the extra savings on much-need household expenses to spur the economy,” said NAMB President Michael D’Alonzo. “NAMB applauds the Obama Administration and the FHFA for realizing this program had limited success to the consumer and making the necessary changes so that the average American homeowner who pays their mortgage on time but is underwater can benefit.”

Enhancements to HARP Phase II address several other key aspects of HARP including:

►Eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers;

►Removing the current 125 percent LTV ceiling for fixed-rate mortgages (FRMs) backed by the GSEs;

►Waiving certain representations and warranties that lenders commit to in making loans owned or guaranteed by the GSEs;

►Eliminating the need for a new property appraisal where there is a reliable automated valuation model (AVM) estimate provided by the GSEs; and

►Extending the end date for HARP until Dec. 31, 2013 for loans originally sold to the GSEs on or before May 31, 2009.

HARP Phase II includes key elements proposed by U.S. Sens. Barbara Boxer (D-CA) and Johnny Isakson (R-GA) in their bipartisan Helping Responsible Homeowners Act.

“This is a positive step in the right direction for the preservation of homeownership for those Americans who have been making their payments and met their obligations," said Sen. Isakson. "They deserve the benefit of today’s lower interest rates.” 

A coalition of bipartisan U.S. Senators, led by Sens. Boxer, Sen. Isakson and Sen. Robert Menendez (D-NJ), recently joined 13 of their colleagues in urging the Obama Administration to quickly implement administrative reforms to help millions of responsible homeowners refinance and take advantage of today’s record low interest rates.

“I am very pleased that the administration is taking these steps to help responsible homeowners refinance at historically low interest rates," said Sen. Boxer. "Allowing these homeowners to refinance at today’s record low rates will keep families in their homes and boost the economy by putting thousands of dollars back in the pockets of borrowers. I urge FHFA to move swiftly to assure that these new policies will help as many homeowners as possible.”

The GSEs plan to issue guidance with operational details about the HARP changes to mortgage lenders and servicers by Tuesday, Nov. 15. Since industry participation in HARP is not mandatory, implementation schedules will vary as individual lenders, mortgage insurers and other market participants modify their processes.

"We still have an enormous amount of work to do to repair housing," said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. "The HARP changes are a good step, but our leaders in Washington need to quickly focus on a broader range of actions for improving the housing marketplace. It has taken a painfully long time for them to recognize that housing is indispensable to the job creation and growth that have been sorely lacking since the end of the recession. The American people are losing patience and they expect far better economic prospects than those they are finding today, which stem in large part from neglecting housing."

Article originally published in the National Professional Mortgage Magazine

Fall Gala and AHBA Annual Awards a Resounding Success!

This Years Fall Gala took Place at the Crest Center and Pavilion in Asheville. With over 130 people in attendance, a good time was had by all. The Parade of Homes winners included:

Craftsmanship Winners by Price Category

$279,000 - $339,000

Mountain Green Builders – Silver Winner

Sulaski & Tinsley Homes, LLC – Gold Winner

$352,000 - $375,000

JAG and Associates Construction, Inc. – Silver Winner

GreenCraft, Inc. – Gold Winner

$600,000 - $650,000

Jade Mountain Builders – Gold Winners

$750,000 - $875,000

Living Stone Construction, Inc. – Silver Winner

HomeSource Builders – Gold Winner

$1,100,000 - $1,350,000

Sulaski & Tinsley Homes, LLC – Gold Winner

Also Awarded were several Special awards for the Parade Homes. Each was judged by a group of out of town judges, and were chosen for their category based on different criteria.

Viewers Choice Awards – Living Stone Construction

NAHB Green Awards – Mountain Green Builders

Innovative Home Award – Mountain Green Builders “SUM House”

AHBA Motto Award – GreenCraft, Inc.

Special Project Award – Living Stone Construction and Westall Chandley Building Supplies.

Best in Show Award is the highest of awards for our Parade. The home chosen represents the beautiful craftsmanship and hard work of the builder, and exemplifies what the Parade of Homes is about.  This years Best of Show award went to HomeSource Builders.

Also awarded at the Gala was the AHBA Annual Awards. These award winners were nominated by their fellow members, and were chosen as an excellent example of what the AHBA is about.

Recruitment of Members is what helps to keep the Asheville Home Builders strong. Skip Brewer of C. Skip Brewer AMP, CGB, Custom Builders was chosen for the Top Recruiter of the year.

This years Affiliate of the year was a instrumental part of the success of the PWB fundraising even this June, and is a regular attendee of our Home Builder events. Kate Duinkerken of Duinkerken Homes was awarded the Affiliate of the year.

As a Co-Chair of the Parade of Homes Committee, Jason Weils of Retro+Fit Design, LLC helped to make this years Parade of Homes a great success. Jason is also a regular attendee to all of the AHBA events.

Builder of the Year award went to a man that has worked hard for the Asheville Home Builders in the past year, and has been willing to offer his time serving on mulitiple boards, as well as our current President. Skip Brewer of C. Skip Brewer AMB  CGP  Custom Builder  was a very worthy choice for Builder of the Year.

The Final Award of the Evening was for the Career Achievement Award. This Award is presented to one individual who has worked hard within the Home Building Industry to help our area as well as fellow builders. This years Career Achievement Award went to W.D. Metcalf of Metcalf Bldg & Rlty Corp  WD Metcalf. W.D. is a charter member of the AHBA, and remains a very influential part of the building community.

Want to know more about this event? Check out our Facebook page for pictures from the evening as well as a overview in the November Blueprints Newsletter.