FNMA has announced that effective with application dates on or after July1, 2010 the following guidelines will apply to borrowers with a pre foreclosure sale/short sale or deed in lieu:

Waiting Period After a Pre foreclosure Sale, Short Sale, or Deed-in-Lieu of Foreclosure

Pre foreclosure Event Current Waiting Period Requirements New Waiting Period Requirements (1)
Deed-in-Lieu of Foreclosure 4 years
Additional requirements apply after 4 years up to 7 years

• 2 years – 80% maximum LTV ratios

•4 years – 90% maximum LTV ratios

• 7 years – LTV ratios per the Eligibility Matrix
Pre foreclosure Sale 2 years
Short Sale No policy currently exists specific to short sales

Exceptions to Waiting Period for Extenuating Circumstances
Pre foreclosure Event Current Waiting Period Requirements New Waiting Period Requirements (1)
Deed-in-Lieu of Foreclosure 2 years
Additional requirements apply after 2 years up to 7 years 2 years – 90% maximum LTV ratios
Pre foreclosure Sale No exceptions are permitted to the 2-year waiting period
Short Sale No policy currently exists specific to short sales

(1) The maximum LTV ratios permitted are the lesser of the LTV ratios in this table or the maximum LTV ratios for the transaction per the Eligibility Matrix.
Bankruptcies The multiple bankruptcy policy is being clarified to state that two or more borrowers with individual bankruptcies are not cumulative. For example, if the borrower has one bankruptcy and the co-borrower has one bankruptcy, this is not considered a multiple bankruptcy. The current waiting periods for bankruptcies remain unchanged.

The House voted 409 to 5 in favor of extending the tax homebuyers credit for closing mortgages.

The Senate can approve the measure in the next 24 hours, and with Presidential ratification, it’s possible that no contracts fall through the cracks with the current deadline of June 30 looming.

As it stands, homes currently under offer will be provided three more months to close in order to be eligible to receive the credit.

Mortgage finance players were not surprised and reacted mutedly and with full expectations the bill will become law. One secondary market trader said in an email stream that he half expects the tax credit to come back after a few more rounds of dismal housing stats.

Another said that the bill represents no new money coming to market and therefore, no change to their outlook for housing finance

After a close brush with the deadline, Congress has passed the Homebuyer Assistance and Improvement Act (H.R. 5623). The extension applies only to transactions that have ratified contracts in place as of April 30, 2010 that have not yet closed. The legislation is designed to create a seamless extension the new closing deadline for eligible transactions is now September 30, 2010. There is will be no gap between June 30 and the date the President signs the bill into law. Extending the tax credit closing deadline will help provide additional stability to real estate markets across the nation. NAR worked closely with Congressional leaders on both sides of the aisle to enact this important legislation.

The Senate also passed the National Flood Insurance Program Extension Act of 2010 (H.R. 5569), an extension of the National Flood Insurance Program until September 30, 2010. This will allow transactions to move forward. The bill is retroactive and covers the lapse period from June 1, 2010, to the date of enactment of the extension. NAR members sent more than 250,000 letters to Members of Congress encouraging them to extend the program.

NAR is still working on restoring the 502 single-family rural housing loan guarantee program. Language is included in H.R. 4899, the Emergency Supplemental Appropriations bill that is currently in conference between the House and Senate. We expect the House to pass that bill shortly and are hopeful the Senate will do the same when they return the week of July 12. When that bill passes, the program will be restored through the end of the fiscal year.

ACAR and IAR will continue to work with our Idaho Congressional delegation on the issue of HUD using an exclusive escrow agent outside of Idaho for the purchase of HUD foreclosures.

10 Best Towns for Families: 2010
Meridian, Idaho

Population: 45,295
Median Income: $66,888
Median Home Price: $177,000
Households with Children: 47%
Student/Teacher Ratio: 20:1
Great Schools Rating: 7

The population has quadrupled in the last decade, but for Debbie and Mark Bennett that just means there’s more Meridian to love. “It’s still a place where people value a low-key, no-fuss lifestyle,” says Mark, 54, a real estate agent. “Everything is comfortable here.”

Along with sons Tyler, 20, and Dustin, 18, the Bennetts like to kick back at Settlers Park, where families gather round with lawn chairs and blankets for free Friday night movies in summer. Debbie, 50, who co-owns a construction firm, gives the schools rave reviews. “The high schools let kids focus on specific interests, whether it’s a vocational trade, computers, or the culinary arts,” says Debbie. “The opportunities for students are tremendous, whether or not they want to go to college.”

The Bennett boys attended a charter institution specializing in medicine. Dustin, who graduated in June, has already passed the state EMT exams and will start at the University of Idaho this fall, and Tyler is enrolled in a pre-veterinary program there. “The education system here doesn’t just make people better students,” says Debbie. “It also prepares them for the real world and helps each kid find a way to contribute.”

Good Deeds: Meridian’s Promise, a coalition of local businesses, nonprofit organizations, schools, and churches, sponsors events year-round, from town cleanups to job fairs, to teach kids the value of volunteering and help those at risk get the guidance and support they need to graduate from high school and succeed in life.

Corteousy of Family Circle Magazine

The foreclosure machinery that has forced millions of Americans out of their homes is beginning to seize up.

Evictions are expected to slow sharply, housing analysts said, as state and national law enforcement officials shine a light on questionable foreclosure methods revealed by three of the country’s biggest home lenders in the past two weeks.

Even lenders with no known problems are expected to approach defaulting homeowners more cautiously and look more aggressively for resolutions short of outright eviction.

In the near term, the change may produce paralysis and confusion.

If foreclosures were not properly done, families who bought the troubled homes could be vulnerable to claims by the former owners. And as more defaulting homeowners become aware of lenders’ problems, they are expected to challenge the proceedings against them.

Apparently alarmed about such a possibility, one of the major title insurance companies, Old Republic National Title, has sent a bulletin to agents saying that “until further notice” it would not insure title to properties foreclosed upon by GMAC Mortgage, the country’s fourth-largest home lender and one of the two big lenders at the center of the current controversy.

GMAC declined to comment, and Old Republic representatives did not return calls.

GMAC has acknowledged legal missteps in processing mortgages, and JPMorgan Chase has acknowledged the possibility of missteps. They and Bank of America have suspended all foreclosures in the 23 states where they need a court’s approval. Idaho is not among the states, because it does not require a judge’s approval on a foreclosure.

Attorneys general in half a dozen states are demanding action or opening investigations. The Treasury Department said Thursday that it was asking regulators to look into “these troubling developments.”

GMAC, Chase and Bank of America are in trouble because, overwhelmed with foreclosures, they tried to process them as quickly and cheaply as possible, defense lawyers say. The companies say they are reviewing their procedures to take care of any violations.

Chase services mortgages in Idaho that it acquired when it took over Washington Mutual Inc., which failed in 2008. Bank of America sells mortgages in Idaho, too; the bank has a mortgage office on West Overland Road in Boise.

The missteps stemmed from the affidavits the lenders file as they seek a quick or summary judgment in thousands of foreclosure cases. The affidavits state certain facts about the case, including the amount owed, which the signer indicates he has personal knowledge of. Without the affidavit, the lender would have to prove the facts at trial.

In depositions taken by lawyers for homeowners, executives of GMAC and Chase said they or their teams signed 10,000 or more affidavits and related documents a month. That did not give them time to review the cases.

Defense lawyers say the disclosures are symptomatic of the carelessness, if not outright fraud, that lenders have been exhibiting for years in their rush to file cases. Many necessary documents have disappeared, with defense lawyers saying the lenders often do not even have standing to foreclose.

“The way the plaintiffs’ lawyers have handled this has corrupted our legal system,” said Thomas Cox, a Maine lawyer whose deposition of a GMAC executive in June helped prompt the current disclosures. “They tried to manufacture foreclosures the way you’d manufacture cars, on an assembly line. It can’t be done that way.”

The federal government has been the majority owner of GMAC since supplying $17 billion to prevent the lender’s failure during the financial crisis.

Other lenders, including Citigroup and Wells Fargo, say their foreclosure procedures have been proper.

NEW YORK (CNNMoney.com) — Forty-nine state attorneys general announced a coordinated probe Wednesday into improper foreclosures performed by the nation’s largest loan servicers, but stopped short of calling for a freeze on all foreclosures.

The group will work to put an immediate stop to improper mortgage foreclosure practices, as well as review past and present practices by loan servicers and potential remedies.

“This group has the backing of nearly every state in the nation to get to the bottom of this foreclosure mess, and we plan to work together as thoroughly and expeditiously as possible,” said Miller.

Alabama is the only state not participating in the investigation.

State attorneys general have led efforts to compel loan servicers to institute foreclosure moratoriums after it was discovered that some employees may have signed off on documents without a proper review, a process known as “robo-signing.”

Freezing foreclosures? What does that mean?
Coupled with allegations of improper notarization of documents, “robo-signing” has left lenders exposed to legal challenges from homeowners who say their loans were improperly handled.

“This is not a gray area. Either our legal requirements for filing foreclosures were followed or they weren’t, and we will hold the companies accountable for their systematic violations,” New Jersey Attorney General Paula Dow said in a statement.

Loan servicers have responded with a range of measures designed to ensure foreclosures are legal. Some have announced a review of pending cases, while Bank of America (BAC, Fortune 500) has halted foreclosure sales in all 50 states.

On Tuesday, Ally Financial, one of the largest holders of foreclosed loans, said it has hired outside accounting and legal firms to examine its foreclosure procedures in all 50 states.

At least six major loan servicers, including PNC Financial (PNC, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Wells Fargo (WFC, Fortune 500) and Litton Loan Servicing are reviewing procedures or documents to determine whether shortcuts may have jeopardized the accuracy of foreclosure proceedings.

A total of 1.8 million loans are in foreclosure in 23 states where judges are required to sign off on foreclosure. Another 1.3 million are pending elsewhere in the nation, according to a Morgan Stanley analyst’s report.

On Wednesday, JPMorgan Chase said it was in the process of reviewing 115,000 loan files. But CEO Jamie Dimon said the underlying foreclosure decisions were justified.

0:00 /3:43Dodd: No fu
“We don’t think there are cases where people were evicted out of homes when they shouldn’t have been,” Dimon said during the company’s earnings call with investors.

Some Democratic congressional leaders, including Senate Majority Leader Harry Reid of Nevada, have voiced support for a foreclosure moratorium while an investigation is conducted.

But those Democrats have found themselves at odds with top members of the Obama administration, including Treasury Secretary Tim Geithner, who argue that a nationwide freeze would undermine an already fragile housing market and prolong vacancies

Mortgage Firm Giants Hault Foreclosure Sales Across the Country

In September and October 2010, several lenders suspended foreclosures in two dozen states due to questions about whether foreclosures were being processed consistent with applicable state law requirements. Concerns are being raised by state and federal elected officials, as well as consumer and fair housing groups, about the validity of ownership of mortgages that have been securitized and resold. At the center of the controversy is Mortgage Electronic Registration Systems (MERS). This firm is responsible for electronically tracking the transfer of assignment of mortgages. Class-action suits are being brought against MERS alleging that the use of the system circumvents state laws.

On October 1, 2010, Fannie Mae and Freddie Mac released statements regarding servicer compliance with foreclosure processing of Fannie and Freddie loans. In the releases, both organizations reiterated that servicers must comply with applicable state laws governing foreclosures. Although nearly all of the foreclosures in question are expected to be fixed eventually, the current situation is creating difficulties and a new hurdle to the recovery of the housing and mortgage markets. REALTORS(r) are reporting that upcoming sales have been delayed indefinitely or cancelled, to the detriment of all involved. Additionally, homes on the market without clear title will make sales much more difficult. While banking executives focus their attention on this problem, it is possible that servicers may be somewhat more receptive to approving loan modifications and short sales, since they avoid the foreclosure procedural problems altogether.

By Alan Zibel, AP Real Estate Writer

WASHINGTON — Officials in 49 states and the District of Columbia have launched a joint investigation into allegations that mortgage companies mishandled documents and broke laws in foreclosing on hundreds of thousands of homeowners.
The states’ attorneys general and bank regulators will examine whether mortgage company employees made false statements or prepared documents improperly.

Alabama was the only state not to join the investigation.

WHITE HOUSE: Administration declines to halt all foreclosures
CRISIS: Fight over who has legal right to foreclose makes mess worse
PROBLEMS: Mistakes widespread on foreclosures, lawyers say

Attorneys general have taken the lead in responding to a nationwide scandal that’s called into question the accuracy and legitimacy of documents that lenders relied on to evict people from the homes. Employees of four large lenders have acknowledged in depositions that they signed off on foreclosure documents without reading them.

More than 2.5 million homes have been lost to foreclosure since the recession started in December 2007, according to RealtyTrac. Another 3.3 million homes could be lost to foreclosure or distressed sale over the next four years, according to Moody’s Analytics.

The officials said they intend to use their investigation to fix these problems in the mortgage industry.

“This is not simply about a glitch in paperwork,” said Iowa Attorney General Tom Miller, who is leading the probe. “It’s also about some companies violating the law and many people losing their homes.”

Ally Financial’s GMAC Mortgage Unit, Bank of America and JPMorgan Chase already have halted questionable foreclosures. Other banks, including Citigroup and Wells Fargo have not stopped processing foreclosures, saying they did nothing wrong.

In a joint statement, the officials said they would look into evidence that legal documents were signed by mortgage company employees who “did not have personal knowledge of the facts asserted in the documents. They also said that many of those documents appear to have been signed without a notary public witnessing that signature, a violation of most state laws.

“What we have seen are not mere technicalities,” said Ohio Attorney General Richard Cordray. “This is about the private property rights of homeowners facing foreclosure and the integrity of our court system, which cannot enter judgments based on fraudulent evidence.”

By Stephanie Armour, USA TODAY

Attorneys General from all 50 states on Wednesday announced a joint investigation into whether major U.S. banks used faulty or fraudulent documents to foreclose upon delinquent homeowners.
The group will investigate whether companies misrepresented that they had reviewed and verified affidavits and documents used in foreclosures.

The goal of the Mortgage Foreclosure Multistate Group will be to stop improper foreclosure practices, review past practices, and to establish a potential financial settlement. The group may also seek to establish a new independent monitoring system to oversee future foreclosure processes.

The multi-state effort is being led by Iowa Attorney General Tom Miller, and also includes a number of state banking and mortgage regulators.

Alabama initially did not sign on to the investigation. It reversed course after the joint statement was released.

Other investigations also are in motion. The Justice Department is looking into the matter, along with other federal regulators. The Senate Banking Committee will hold a Nov. 16 hearing into foreclosure practices.

Employees who signed foreclosure documents for JP Morgan Chase, Ally Financial’s GMAC Mortgage unit, and Bank of America have said in depositions that they signed thousands of papers and affidavits without reading or reviewing them.

Major banks including Chase, Wells Fargo, GMAC, PNC Financial Services and Bank of America are suspending foreclosures or reviewing their foreclosure process — some in all states, and others just in those 23 states that require court approval for foreclosures. The Obama Administration has rejected calls for a nationwide foreclosure moratorium.

The foreclosure delays could cost banks up to $6 billion, according to FBR Capital Markets analyst Paul Miller — or $1,000 per month for every home that is delayed.

Meanwhile, the Federal Housing Finance Agency is leading talks between title insurers and banks. The agreement would provide assurances that banks would pay for any costs if ownership of a foreclosed home is challenged and the bank was found not to have followed proper foreclosure procedures.

NEW YORK (CNNMoney.com) — Bank of America reviewed 102,000 foreclosures in the 23 states where a court must sign off on the proceedings, and it is now restarting the process on those cases, the company said Monday.

The company said the first of the new affidavits will be submitted by Oct. 25, and that it will continue its review in 27 other states.

According to a spokeswoman for the bank, no errors were found during the review, and fewer than 30,000 foreclosure sales across all 50 states will be delayed as a result of the investigation.

The announcement comes one day before the bank’s third quarter earnings report, and might ease investor concerns over the scale and timeframe of the bank’s review process.

“This is an even better outcome than we previously thought,” said Paul Miller, an analyst at FBR Capital Markets. “We thought January was a more likely time to restart the [foreclosure] process.”

The news sent Bank of America shares up 36 cents to $12.34, or 3.01%.

The bank said in a statement that the review process “has been an important step to give customers confidence they are being treated fairly.”

State attorneys general have stepped up pressure on banks in recent weeks after it was revealed that some bank employees had signed foreclosure affidavits without verifying that the documents were accurate, a process known as “robo-signing.”

Foreclosures: Next to hit banks?
Bank of America launched its initial review on Oct.1, and said on Oct. 18 that it was expanding its document probe to all 50 states.

The company maintained that initial assessments in the remaining 27 states show the basis for foreclosure decisions were accurate.

At least five other major mortgage servicers have announced their own document reviews.

All told, 1.8 million loans are in foreclosure in the 23 so-called judicial states, while 1.3 million are pending elsewhere in the country, according to a Morgan Stanley analyst report.