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Shah Tehrany's Blog

By Shah Tehrany | Mortgage Broker
or Lender in New York, NY

MARKET UPDATE 3/28/13: From The Capital Markets Desk Of Franklin First Financial

11.58-r1

There is really very little to report regarding the markets today. So while the bond markets prepare for an early start to the weekend @ 2:00, there seems to be a calm in the markets in-spite of the very tense situation going on in Cyprus as the banks reopen. The video of depositors waiting outside the bank is just a scary thought that is reminiscent of the scene from the movie “It’s a Wonderful Life”. So I certainly feel those people’s pain and angst. Hopefully the significant losses are isolated to the people who deserve the bad karma. In the meantime we seem to be on solid footing for today with the 10yr trading @ 1.85%.

However, we did have some mortgage news that hit the tape yesterday. The Federal Housing Finance Agency announced a new, simplified loan modification program for 90+ day’s delinquent borrowers that will run from July 1, 2013 to August 1, 2015. Here are the highlights of the program:

  • The new program is designed to lower monthly payments for 90+ days delinquent borrowers and help keep borrowers from foreclosure without requiring financial or hardship documentation.
  • Eligible borrowers must show willingness and ability to pay by making 3 on-time trail payments after which mortgages will be permanently modified.

Program will be available to:

  • Borrowers with mortgages guaranteed by Fannie Mae or Freddie Mac only.
  • Must be 90+ days to 24 months delinquent.
  • LTV at least 80.
  • Already modified loans are eligible if they have only been modified once before.
  • Mortgages secured by second homes, investment properties are eligible.

Now this program does not go into effect until 7/1 so the big aggregators do have time to assess it. I do expect this to initially be a servicer/borrower transaction. However, it would not surprise me if some correspondent lenders start to offer it once the program gets established. The biggest obstacles for this to ever be offered thru the correspondent channels is the wording that “servicers will be required to offer eligible borrowers”. This does not clearly indicate any allowable involvement for a 3rd party. I am sure that this will be clarified in the weeks ahead.

With the markets closed tomorrow there will be no Update so I hope everyone has a Happy Easter or just a pleasant weekend.

Source: http://www.AskShah.com

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