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Another change being put into place for properties that have been foreclosed on and making sure that the redemption period has been expired before Fannie Mae will allow financing on this property.

Fannie Mae will consider this a Title Defect and not allow for financing.... watch the video by Think Big Work Small - Frank & Brian are a great wealth of knowledge and they have a pdf of Fannie Mae announcement: HERE IS THE LINK! http://www.thinkbigworksmall.com/mypage/archive/1/51023 

I would encourage all to watch this video! Thank you!

JUNE 16, 2010

Fitch Ratings Ltd. forecasts that most borrowers who get lower mortgage payments under a federal government program will default within 12 months.

Among those with loans that aren't backed by any federal agency, the redefault rate within a year is likely to be 65% to 75% under the Obama administration's Home Affordable Modification Program, or HAMP, according to a report to be released Wednesday by Fitch, a New York-based credit-rating firm. Almost all of those who got loan modifications have already defaulted once.

Diane Pendley, a managing director at Fitch, said the failure rate was likely to be high largely because most of these borrowers were mired in credit-card debt, car loans and other obligations.

The Treasury Department has said that among people who have been given loan modifications under HAMP, the median ratio of total debt payments to pretax income is still 64%. That often means little money is left over for food, clothing or such emergency expenses as medical care and car repairs.

"The borrower remains in a very high-risk situation," Ms. Pendley said in an interview. "The other debts don't go away."

A Treasury official said HAMP "is making a real difference in the lives of hundreds of thousands of homeowners." He said the government has reduced the risk of redefault by offering financial incentives to borrowers who remain current on loan payments.

Fitch based the redefault forecast on the performance of loans that were modified in the first quarter of 2009. Those modifications were done outside of HAMP, which took effect later in the year. But Ms. Pendley doesn't expect a major difference between the results of HAMP modifications and those made under lenders' programs.

Even if two-thirds of the loan modifications fail, Ms. Pendley said, that doesn't mean HAMP is a failure. "If you can save one-third of the borrowers, I think it is worth the exercise," she said. She also said the HAMP program, announced in early 2009, had provided a basic outline for loan servicers to follow in modifying loans. Loan servicers, often owned by banks, collect payments and handle foreclosures. Previously they were "all over the place" in their methods for dealing with foreclosures, Ms. Pendley said.

At the end of April, about 295,000 households were benefiting from long-term modifications under HAMP, which typically involves cutting the interest rate as low as 2%, according to the Treasury. Another 637,000 households were in trial modifications, under which they need to show they can make their new, lower payments consistently and provide documents proving they are eligible. Under the $50 billion HAMP program, the federal government provides financial incentives to borrowers, loan servicers and mortgage investors for modifying loans.

Andrew Jakabovics, an associate director at the Center for American Progress, a Washington think tank with ties to the Obama administration, said results of HAMP so far were mixed. Borrowers continue to complain that it often takes months, and sometimes more than a year, to get decisions from servicers on whether a loan can be modified on a long-term basis. Mr. Jakabovics said the program would work better if the government dealt directly with applicants for HAMP and decided which ones qualified, rather than delegating that function to servicers.

But Mr. Jakabovics said he didn't expect major changes in HAMP, which is scheduled to remain in effect through 2012. "For better or worse," he said, "what we've got now is what we're going to go with."

How could one man be so smart about the future this many years ago?

THIS IS SO RELEVANT !!

John F. Kennedy held a dinner in the white House for a group of the brightest minds in the nation at that time. He made this statement: "This is perhaps the assembly of the most intelligence ever to gather at one time in the White House with the exception of when Thomas Jefferson dined alone." Especially read the last quote from 1802. When we get piled upon one another in large cities, as in Europe, we shall become as corrupt as Europe . Thomas Jefferson The democracy will cease to exist when you take away from those who are willing to work and give to those who would not. Thomas Jefferson It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world. Thomas Jefferson I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them. Thomas Jefferson My reading of history convinces me that most bad government results from too much government. Thomas Jefferson No free man shall ever be debarred the use of arms. Thomas Jefferson The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government. Thomas Jefferson The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants. Thomas Jefferson To compel a man to subsidize with his taxes the propagation of ideas which he disbelieves and abhors is sinful and tyrannical. Thomas Jefferson Thomas Jefferson said in 1802: 'I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property - until their children wake-up homeless on the continent their fathers conquered.'