Mortgage and Rental Payment Relief Updates - COVID-19 - Los Angeles

In conjunction with the “Safer at Home” emergency order there needed to be some protection for property owners and renters. In the present environment many are unable to generate an income. The first city action was to protect tenants from being evicted based on the emergency order. The city is allowing tenants to defer payments for up to 6 months after the end of the emergency period.

Below are form links to help define and facilitate these changes.

NOTICE RE: NON-PAYMENT DUE TO COVID-19 (Notice to Renter of Rights Regarding Non-Payment Due to COVID-10)

NOTICE RE: NON-PAYMENT DUE TO COVID-19 (Tenant Provided Prior Notification to Landlord of Non-Payment Due to COVID-19)

Receipt for Partial Rent Payment (COVID-19 Eviction Moratorium)

In addition, here is a link to the housing department guidelines:
HCIDLA (Housing and Community Investment Department of Los Angeles) - COVID-19 EVICTION MORATORIUM

The next step still being worked on is to see if landlords and homeowners will be granted a deferment of their payments with the knowledge they would be taking in less income based on the above emergency action. The director of FHFA (Federal Housing Finance Agency) recently explained the new Mortgage Assistance Program. This program affects all mortgages guaranteed by Fannie Mae, Freddie Mac, FHA and most of all conforming loans. Some of the large banks have followed suit with their non-conforming portfolio loans as well. To look up your loan go to the links below. In each case you will need to contact your servicer (who may or may not be your lien holder) and navigate their process.

Fannie Mae loan look up: https://www.knowyouroptions.com/loanlookup
Freddie Mac loan look up: https://ww3.freddiemac.com/loanlookup/

We will continue to reach out with useful resources to help you navigate these tough times.
Be safe.

FHA mortgage premiums about to go up

For those who qualify for low interest loans, things are about to get a little more pricey. Earlier this month, the government accounted the FHA Mortgage Insurance Premium will increase 10-15 points (0.10% on mortgages under $625,000, 0.15% for that amount or more), raising concerns that those affected will be lower income and first-time home buyers. Although one of many increases that have occurred over the past few years, this increase will become permanent and will require insurance for the life of the loan, but is mainly aimed at long-term housing market stability by making loans less risky. However, many rely on FHA loans for low down payments (15.41% of homes in 2012 were purchased using an FHA loan), and making home loans less affordable could put a damper on market recover.

The rate increases are set to go into effect on April 1. In the past, the insurance would fall off at 22% equity, but now monthly insurance payments will be required for 30 years on a 30 year FHA loan, unless a 10% down payment is made at the outset.

Looking to buy a home in Northeast Los Angeles? Contact Urban Hillsides today!

Mortgage Debt Relief Act extended through the new year

erase-debt

According to a survey by YouWalkAway.com, the extension of the Mortgage Debt Relief Act of 2007 will drive more short sales in 2013.

The act was set to expire at the end of 2012, but Congress voted to extend it another year, thus providing debt forgiveness for underwater homeowners who choose a short sale, loan modification, or foreclosure rather than defaulting on their loan.

While the report doesn't see a new wave of mortgage defaults this year, the extension of the act will provide tax relief for those homeowners who are currently in foreclosure. New foreclosure applicants, however, can only expect to have that tax relief for a year (which is how long the act has been extended) – a time period that may not be enough because of how long some foreclosures can take.

As an alternative to defaulting on your loan, a short sale or loan modification may be the best route.

Ready for a new servicer on your loan?

Bank of America may have just unloaded two million loans (totaling $306 billion) to other lenders, but it’s already looking to sell rights on at least $100 billion more MSRs. Last week, BofA started with selling $306 billion in mortgages to Nationstar Mortgage Holdings and Walter Investment Management. The move is not unusual – lenders have been known to do it as costs rise and servicers go bankrupt. Additionally, Basell III capital rules will soon take effect, forcing banks to “hold more capital for mortgages serviced or to put less premium on the value of MSRs.” Servicing companies are exempt from this rule, so they are eager to buy.

Ally Financial and JP Morgan are looking to do the same soon.