Nomura’s note to clients has a take few have offered: The first time homebuyers are holding out and it’s not student debt, a shift away from homeownership as a choice by Millenials, or any of that.
“One lingering concern is that many conventional home buyers that need mortgage financing for purchasing homes haven’t been entering the housing market as the share of first-time home buyers of existing home sales dropped 2pp to 27% in May and mortgage applications are still subdued,” Nomura says.
Analysts say it’s not that Millennials and other potential homebuyers aren’t qualified in terms of their credit scores or in how much they have saved for their down payment.
It’s that they think they’re not qualified or that they don’t have a big enough down payment.
Applying for a mortgage is as uncomfortable and probing as a colonoscopy for some people. That’s even people who know they have great credit.
But with all the talk that makes its way out of the trade space and onto the street, the average buyer has heard vague talk about tightened credit boxes, QM rules, ATR rules, and so on – and what they think is that the colonoscopy scope just got bigger and now there’s an audience for the procedure.
That makes for, well...
There’s not as much talk making its way to buyers that the credit box has actually expanded.
Furthermore, barely a week ago, Freddie Mac put out an appeal to potential buyers to explain no, the down payment requirements aren’t as bad as most think. As HousingWire reported, potential homebuyers seem significantly unaware that more than one in five borrowers who took out conforming, conventional mortgages this year put down 10% or less.
The problem is, these potential homebuyers are sidelining themselves. They don’t want the embarrassment or heartbreak of a refusal, so they either stick with their apartment for a while longer, or stay in the house they’ve outgrown.
Fannie Mae is offering up to a 3.5% incentive for owner-occupant buyers who request the incentive at their initial offer during the First Look period, purchase a HomePath property in select states on or before April 30 and close on or before June 30, 2014.*
To be eligible for this incentive:
Fannie Mae is offering up to a 3.5% incentive for owner-occupant buyers who request the incentive at their initial offer during the First Look period, purchase a HomePath property in select states on or before March 31 and close on or before May 31, 2014.*
Did You Know?
Seller Credits Allowed by Loan Type
Primary Residence / 2nd Home
Conforming Loan Amount
90.01% - 95.00%
75.01% - 90.00%
75% or less
All LTV / CLTV
Seller Credits can be applied to all closing costs and/or prepaid items not to exceed the actual amount of the closing costs.
*Conforming Hi Balance is restricted to 3% seller credit at ALL LTVs.
4% not including unallowable fees
Seller Credits can be applied to all closing costs and/or prepaid items not to exceed the actual amount of the closing costs. Borrower may receive funds back equal to or less than any amount deposited into escrow for the earnest money.
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Contact: Evan Gerberding
CalHFA Reports $2 Billion Effort to Assist Homeowners Struggling to Remain in Homes Is Going Unused
SACRAMENTO – The California Housing Finance Agency reports funds for four programs to to help homeowners with the funds to
help families remain in their homes, help during unemployment and catch up on payments is going unused and remain availabe since 2009.
The programs, under the umbrella title of Keep Your Home California, are federally funded as
part of the U.S. Treasury Department’s Hardest Hit fund, and are aimed at helping low and moderate income homeowners struggling to pay their mortgages amid the worst real estate crisis ever.
“Our goal is to get the very most out of these federal dollars to assist California families,” said
Steven Spears, Executive Director of CalHFA. “With families struggling through a number of
financial hardships and the disruption in the real estate market, these programs will help those
in need while stabilizing neighborhoods and communities severely impacted by foreclosures.”
California received a total of nearly $2 billion through the Hardest Hit fund. After consulting with
community leaders throughout the state, four programs were created to assist California
Mr. Spears said that all four programs are intended to help avoid foreclosure: three offer several
forms of mortgage assistance, as well as a separate program that will provide transition
assistance to borrowers who execute a short sale or deed in lieu transaction.
All of the programs are designed specifically for low or moderate income homeowners who are
either unemployed or are facing another financial hardship, have fallen behind on their
mortgages and owe significantly more than the value of their homes.
“In partnership with the federal government, Keep Your Home California is one more step we
are taking to help low and moderate income California families who are struggling to remain in
their homes,” said Assemblymember Norma Torres, Chair of Assembly Committee on Housing
and Community Development. “No one program will solve the foreclosure crisis affecting our
state, but together we hope to make a difference for as many families as possible.”
"The foreclosure crisis continues to hinder our potential for economic recovery, and strips
stability from our communities,” said Assemblymember Mike Eng, Chair of the Assembly
Committee on Banking and Finance. “I'm pleased that the Keep Home California program is
ramping up to address these challenges and, as the program moves forward, I will continue to
monitor its progress to ensure that it's an all around success at assisting California borrowers."
Specifically, the Keep Your Home California programs provide:
imminent danger of defaulting on their home loans or need help catching up
with a modified loan arrangement.
temporary change in a household circumstance. The program will provide up to $15,000
per household to reinstate mortgages to prevent foreclosures.
moderate income homeowner is facing a serious financial hardship and owes
significantly more than the home is worth. The program requires lenders to match any
assistance provided by the Keep Your Home California program.
A full description of the programs can be found at
How to Apply:
The programs will be limited to homeowners who meet a number of criteria, including owning
and occupying the home as their primary residence, meeting income limits and facing a financial
hardship. Homeowners who consummated a “cash-out” refinance are not eligible for Keep Your
Home California programs.
To apply for the assistance, a homeowner should contact the Keep Your Home California call
center toll-free at 888.954.KEEP(5337) or their mortgage servicer – the company to which the
borrower sends monthly mortgage payments. Each of the mortgage assistance programs
requires the participation of the mortgage servicer.
As of February 9, the following servicers are participating in all four Keep Your Home California
Other servicers, including Bank of America, JPMorgan Chase, CitiMortgage and Wells Fargo
are currently participating in some, but not all programs at this time. The list of participating
servicers is expected to expand in the coming weeks.
Full details regarding servicer participation can be found at
“The problems of unemployment and the unprecedented disruption in our real estate markets
have impacted so many families,” Mr. Spears said. “These programs are designed to move
homeowners who have been told ‘no’ into the ‘yes’ category and qualify them for a mortgage
they can afford over the long term.”
Borrowers with questions about the program may call Keep Your Home California toll-free at
CalHFA Announces Full Implementation of $2 Billion Effort
to Assist Homeowners Struggling to Remain in Homes
SACRAMENTO – The California Housing Finance Agency today announced the full
implementation of four programs to fight the ongoing foreclosure crisis in California, with the
primary goal to help families remain in their homes.
part of the U.S. Treasury Department’s Hardest Hit fund, and are aimed at helping low and
moderate income homeowners struggling to pay their mortgages amid the worst real estate
crisis in decades.
imminent danger of defaulting on their home loans.
The First-Time Buyer California State Tax Credit is still available but cannot be applied for til you've signed closing docs. AND, you need to download the form. have your agent have the seller fill out their part, take it to escrow to have section V filled out there and GET A COPY OF YOUR HUD1 CLOSING STATEMENT AT ESCROW to fax in immediately. Reservations can be make ONLY for New Home Buyers, short-sale, existing home buyers must wait til their loan docs are signed and the best time to get the seller to fill in their info is before you close--same with escrow! Here's the link with the downlodeable form--you may want your real estate agent to have the seller do their info and send to escrow ahead of closing so section V is filled out. YOU must fax it to the number here: http://www.ftb.ca.gov/individuals/new_home_credit.shtml
The site updates to show the amount left for credit demand so mark it as a favorite! Good luck and Congratulations if you qualified for Federal and State Credit!
In January, the Department of Housing and Urban Development (HUD) announced the first major changes to FHA financing for the year changing the maximum seller concessions from 6% to 3% early summer 2010.
The changes to seller concessions will have a large impact. Concessions include what the seller is contributing to the buyer in the transaction. A common concession is a credit from the seller to cover the buyer’s closing costs. A 3% limit on seller concessions is enough to cover closing costs on a purchase of around $250,000, but with a purchase price of anything less than $250,000 the buyer will be forced to pay some closing costs out-of-pocket. This will be a pain-point for many FHA borrowers in the months to come.
The change in concessions will also impact new construction transactions. Upgrades on a new home will be considered a seller concession if the purchase and sale clearly states that there was an increase in price for these upgrades. For example, supposing a buyer plans to purchase a new home at $295,000. In this transaction, the builder/seller is offering to pay the buyer’s closing costs up to $9,000, and the buyer is putting $20,000 down. The buyer’s loan officer arranges a loan with closing costs of approximately $8,000 for a $275,000 loan. In this instance, $275,000 x 3%= $8,250 — the buyer is okay.