Florida Posts First State Draft Allocation Method and Strategies for Hardest Hit Funding.

As I have said previously, Oregon will benefit from the work being done by states selected in the first round of Hardest Hit funding. (Use keyword Hardest Hit to find all posts on this program).

I have done a quick search of websites for the first 5 states funded (Arizona, California, Florida, Michigan, and Nevada) and Florida appears to be the best in posting information up to this point.

Florida's DRAFT targeting formula uses a variety of factors to arrive at how funds will be allocated. All of this I am sure is subject to change, but nonetheless the draft Florida allocation formula HERE is a good idea of the kinds of factors being considered elsewhere.

A second DRAFT Florida strategies document HERE provides more background on the factors being considered in putting together their program.

While allocation method and strategies are important, the delivery model, program design, outreach, and public transparency will be at least as important in putting together a successful $88 million Hardest Hit program for Oregon.

Originally created and posted on the Oregon Housing Blog.

HUD Says that Loan Modification Offers Jump to 40,000 Last Week.

Time story is HERE.

Federal Reserve Board Final TILA Rule Publication Follow Up Resources.

This is a follow up to my post yesterday on the Federal Reserve approval of final Truth in Lending rules to curb predatory lending practices. Additional resources:

1. A summary of the changes from the Federal Reserve website is HERE.
2. A Mortgage Bankers Association of America website posting of Federal Reserve consumer testing of disclosures is available HERE.
3. On CSPAN, a Flash video of the Board meeting itself is available HERE.
4. A Bloomberg News summary of the rules and some reaction is HERE.
5. Center for Responsive Lending reaction is HERE.

Senate Housing Bill Uses Trust Fund Provisions to Help Pay for FHA Foreclosure Program.

National Low Income Housing Coalition has a press release HERE that explains how funding for Housing Trust Fund would be generated and allocated in the recently passed Senate markup of the FHA/GSE reform bill. Release says that 50% of the trust fund funding would be diverted to pay for FHA foreclosure relief provisions in first year, and 25% in the second year. Earlier bills had diverted trust fund money for disaster housing use in the first year, so it it unclear to me what the push back will be from states who would no longer receive that special allocation. As Bush administration has previously opposed housing trust fund it is also unclear whether that opposition will continue.

Senate Subcommittee Hearing Today on Lender Bankruptcy Misconduct.

NY Senator Chuck Schumer is chairing a Senate Justice subcommittee hearing today titled "
"Policing Lenders and Protecting Homeowners: Is Misconduct in Bankruptcy Fueling the Foreclosure Crisis?”

Hearing is at 11 A.M Pacific Time; witness list and hearing information is HERE.

Freddie Posts Loss of $2.45 Billion for 4th Quarter.

Bloomberg story HERE says that Freddie Mac losses for 4th quarter 2007 were $2.45 Billion.

My post from 3rd quarter HERE, put Freddie's last quarterly loss (3rd quarter) at $2 Billion.

My earlier post on favorable tax treatment for Freddie is HERE.

New Temp Metro FHA Mortgage Limits: It's Not Rocket Science--I Project New Portland Metro FHA Limit Exceeding $400k.

Todays Oregonian Real Estate Section has Inman News story which could leave impression that setting new temporary FHA mortgage limits is going to be difficult for the metro areas in the country who will be able to use the new 125% of median sales price standard. (Inman is subscription site, and story doesn't appear to be on Oregonlive site, hence no link to story).

With data sources now available nationally, and close working HUD relationship with local multiple listing services, it's not going to be difficult at all and I am sure that HUD will get it done by March 14th deadline with little problem.

Let's take Portland Metro Area as an example.

1. Current FHA limit (95% of median sales price ) is stated in the story as $304,950.
2. With simple division the median sales price used to set the current mortgage limit was $321,000, ($304,950/95%), substantially exceeding the $216,840 limit required to temporary use the 125% of median sales price standard in a metro area.
3. Applying 125% to current median sales price of $321,000, yields a likely new temporary FHA loan limit of $401,250 for the Portland metro area.

Caveat :
This $401,250 projected median sales price maximum mortgage could slide up or down for a couple of reasons.

1. IF HUD decides to use a uniform national data source for metro median sales prices (possible but unlikely).
2. IF the median sales price for any county in the Portland metro area is now higher than $321,000, this could increase the temporary FHA mortgage limit. (As it should be, the HUD/FHA practice has been to use the highest median sales price of any county within a metro area).

P.S. If new Portland FHA limit turns out to be substantially different than my projection, I will try to remember to post why it was different, OR I will adopt a new resolution to not try to predict anything in the future.

House Judiciary Hearing: Mortgage Foreclosures, Identifying Solutions.

Formal title of this hearing was "Hearing on the Growing Mortgage Foreclosure Crisis: Identifying Solutions and Dispelling Myths."

Held Tuesday Jan 29th, witness testimony combined in one PDF file HERE.

Moodys Economy Now Mark Zandi testified that the estimated 250,000 families who may be helped by the voluntary Hope Now efforts would likely be insufficient to deal with the scope of the looming foreclosure problem:

"Thus, while the Hope Now effort is laudable, it should not forestall passage of legislation such as HR 3609 to provide hard-pressed homeowners facing foreclosure more protection in a Chapter 13 bankruptcy. If Hope Now is successful in helping many borrowers, then these borrowers would not avail themselves of the opportunity to avoid foreclosure in Chapter 13 provided by this legislation. However, if Hope Now is not sufficiently successful, which may very well be the case, then this legislation will prove invaluable." "...[HR 3609]", which would give bankruptcy judges the authority in a Chapter 13 to modify mortgages by treating them as secured only up to the market value of the property, will significantly reduce the number of foreclosures. An estimated over one fourth of homeowners likely to lose their homes between now and the end of the decade, equal to an estimated 570,000 homeowners, would benefit from this legislation."