Expanded Refinance Assistance for Underwater Borrowers

Borrowers who are current on their home loans may be able to refinance for lower interest rates, even if they are seriously upside down.  The Federal Housing Finance Agency (FHFA) announced today that it will broaden the scope of the Home Affordable Refinance Program (HARP) by removing the current 125 percent loan-to-value cap for fixed-rate mortgages backed by Fannie Mae and Freddie Mac.  Other program enhancements include, among other things, reducing certain fees, eliminating the need for a new property appraisal if the FHFA has a reliable automated valuation model (AVM) estimate, and extending HARP until the end of 2013.

More information is available from FHFA at http://www.fhfa.gov/webfiles/22721/HARP_release_102411_Final.pdf.

Update on Foreclosure Pipeline

A recent report by the leading federal bank regulator, the Office of the Comptroller of the Currency ("OCC") reveals some interesting trends in the 2nd quarter of 2011.  The OCC's mortgage performance report covers about 63 percent of all first-lien mortgages in the United States, worth $5.7 trillion in outstanding balances. 

In a nutshell, foreclosures are continuing to increase, although at a seemingly slower rate as mortgage servicers pursue alternatives to foreclosure.  Unfortunately, nearly half of the loans modified since 2008 have subsequently gone into delinquency.  Looking ahead, the OCC anticipates an increase in REOs coming onto the market as stalled foreclosures work their way through the system.

Here's a look at the numbers:

• Increase in early stage (30-59 days) delinquencies rose by .04% from the previous quarter.  This increase is attributed to the sluggish economy and continued high unemployment, as well as seasonal variations.
• The number of late stage delinquencies (60+ days) also increased slightly in the 2nd quarter after having decreased in each of the previous five quarters.
• Completed foreclosures increased by 1.2% from the previous quarter were up 27% from the quarter prior to that (Q4 2010).
• A brighter note is that newly initiated foreclosures have declined for the past three straight quarters as lenders seek alternatives to foreclosure for delinquent borrowers:
• There were 56,403 new short sales reported during Q2, up 12% from the previous quarter
• Mortgage servicers implemented 456,397 home retention actions, including loan modifications, trial-period plans, and payment plans durign the 2nd quarter of 2011.
• Of loans modified since the beginning of 2008, nearly half – 48.7 percent – have since gone delinquent

What Solar Power Can Mean For Your Home

We all know that having a solar system can help reduce your utility bills, but what does it mean for the value of your home?  According to a recent article posted on Earth911.com, having a solar system can add 3% to 4% to your market value, based on data collected by the National Bureau of Economic Statistics. 

These results are supported by another study by the Department of Energy's Lawrence Berkeley National Laboratory which found that solar panels increased home prices by about $3.90 to $6.40 per watt, which translates to around $17,000 for a 3,100-watt system.