VII. New Business A. Eminent Domain Policy Reaffirmation 1. NAR Existing Policy 2. Conventional Finance and Lending Committee Reaffirmation Statement
B. Legislative and Regulatory Update 1. Responsible Homeowner Refinancing Act, S. 3085 Requires Fannie Mae and Freddie Mac, in carrying out the Home Affordable Refinance Program (HARP), to adopt specified criteria pertaining to: (1) borrower eligibility, (2) representations and warranties, (3) prohibition on up-front fees, (4) alternative streamlined methods to appraise the value of a property, (5) an administrative penalty for lien-holder refusal to resubordinate junior liens, (6) carryover of mortgage insurance, and (7) guarantee fees.
These changes, along with other changes in the legislation would allow more homeowners to take advantage of the HARP.
2. Expanding Refinancing Opportunities Act, S. 3047 On May 9, 2012, California Senator Diane Feinstein introduced S. 3047, the Expanding Refinancing Opportunities Act of 2012. The legislation would allow homeowners who are current on upside-down mortgages that are not federally backed to refinance into an FHA mortgage. In order to qualify the homeowner must:
• Be current on their mortgage, • Meet a minimum credit score, • Have a loan amount under the FHA loan limit, • Be a single family principal residence, and • Not have a loan to value (LTV) above 140 percent.
To cover the cost of this proposal the legislation would extend a 10 basis-point increase in the GSEs g-fee for an additional year.
3. Rebuilding Equity Act, S. 3520 Requires Fannie Mae and Freddie Mac (government sponsored enterprises or GSEs) each to establish a voluntary program for eligible borrowers who qualify for the Home Affordable Refinance Program (HARP) carried out by the GSEs, under which the GSEs shall pay up to $1,000 of the closing costs associated with applying for and receiving refinancing when the borrower agrees to refinance a 30-year mortgage loan into a fully amortizing loan with a term of not longer than 20 years. Requires the subject property to have a loan-to-value ratio of not less than 105%.
4. Mortgage Modification Outreach Act, S. 3589 Would create a pilot program where a mortgage servicer who has affiliated national retail bank branches could offer mortgage modification information in the branches to their existing clients seeking assistance.
5. Fast Help for Homeowners Act, H.R. 6153 On July 19, 2012, California Congressman Jerry McNerney, introduced H.R. 6152, the Fast help for Homeowners Act. The legislation would require a subordinate lien holder on a GSE, FHA, VA or Rural housing loan to respond within 45 days to a written short sale request or the request shall be considered approved. The legislation is in committee, and while it is unlikely to move prior to the end of the year, it is hopeful the legislation will bring to light the difficulties of dealing with subordinate lien holders in a short sale.