I frequently need to know who actually owns the notes and mortgages connected with my clients’ homes. So, keeping an eye on who the players are on the National mortgage scene makes a certain amount of sense.
Here is an article from BusinessWeek that makes me reconsider my decision not to subscribe. I mean, seriously, at $2.49 a month delivered automatically to my Kindle while I sleep — why am I not? However, I regress.
This article makes two very serious points. First, FHA is now backing more mortgage loans than Fannie and Freddie combined. Why? Simple, lower down payment requirement. Second, 90% of the current mortgage market is guaranteed by the U.S. Government by way of FHA, Fannie, Freddie (and to a much lesser extent VA and FHLBB).
I can see how this happened. The takeover of Fannie and Freddie was a reaction to events rather than a carefully planned policy choice, and what to actually do with them is going to be a great big, hairy mess. Then, there has been enough going on with regulatory changes and policy decisions that making changes to FHA policies would require affirmative political effort. Not making them is the default. So, by default the U.S. Government has become the backstop for effectively the entire home mortgage market. This is an amazing policy decision to be made by accident.
A man called me this morning who had just been served with a foreclosure Petition. He says that he has a mortgage modification agreement negotiated with Wells Fargo. So, they sued him anyway. Frankly, he may be right — and he may not be. He wanted to know what he should do about filing an answer to the foreclosure. I told him that the first thing he needed to do was send a letter to his Congressmen. He didn’t know who they were.
I did explain to him how to file an Answer and told him twice that he needed to file it with the Court, and that meant take it to the Court Clerk’s office and then send a copy to the foreclosure attorneys.
Still, is it any wonder that we get the legislative responses that we do out of Washington when the people who call my office don’t even know who their Congressional representatives are?
It occurred to me after I put up the post about VA loans, that not all servicers are complying with FHA requirements either. So, if you have an FHA loan, that loan is in foreclosure, about to be, in default or just in trouble; you probably want to read the FHA rules for loss mitigation (i.e., how mortgage servicers are supposed to deal with loans in trouble).
The FHA regs are also on my website. Check out the Foreclosure page, left hand panel, towards the bottom.
As usual, I don’t do mortgage workouts. If you need help, contact someone who has been trained by the FHA as a mortgage counselor or a lawyer who is well-versed in FHA regs.