As Alex reported 9/1/2012 on Property Source Radio.
Realtor.org – Daily Real Estate News | TUES, AUG 28, 2012
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Fannie Mae, one of the nation’s mortgage giants, announced new lending restrictions that might make it even more difficult for some home buyers to qualify for a loan.

New applicants and home owners looking to refinance may find they have to meet more stringent standards, such as in meeting new loan-to-value ratios in qualifying for a mortgage. For example, Fannie announced that the maximum loan-to-value ratios permitted will now be 90 percent, down from 97 percent. Also, the GSE says that some loans will now require higher credit scores. For example, borrowers who are applying for an adjustable-rate loan will need a credit rating of 640—which is up from 620.

Also, self-employed applicants may be required to supply more tax information, such as two years of tax returns to verify their income.

“This can knock a decent portion of borrowers out of the picture who had a rough year in business two years ago,” says Matt Hackett, underwriting manager at New York lender Equity Now Inc. “You’d be surprised how much of an effect this has.”

Fannie Mae, along with fellow GSE Freddie Mac, back about two-thirds of all new mortgages.

Source: “How Fannie Mae Is Making it Harder to Get a Home Loan,” Credit.com (Aug. 27, 2012)

As Alex reported 8/18/2012 on Property Source Radio.
Realtor.org – Daily Real Estate News | TUES, AUG 14, 2012
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Some analysts suggest that the financial crisis has reshaped attitudes of younger generations similar to how the Great Depression did for generations during its aftermath.

The younger generation is most at risk for reshaped attitudes, they say. “This is a generation that is scared of commitment, wants to be light on their feet and needs to adjust to whatever happens,” Cliff Zukin, a professor of public policy and political science at Rutgers, told Bloomberg. “What once was seen as a solid investment, like a house or a car, is now seen as a ball and chain with a lot of risk to it.”

The younger generations’ current financial situation is what’s most holding them back. College graduates emerging post-recession are earning less and owing more in student loan debt nowadays. Forty percent of college graduates surveyed say that their student loan debt is the main thing that is delaying them from making major purchases, like buying a home.

The housing market has shown some positive signs lately, but the slow pace of recovery is making many younger adults hesitant, Jeff Lubell with the Center for Housing Policy told Bloomberg. Case in point, the number of first-time home buyers is shrinking while the number of renters is increasing.

But Lubell says he is concerned that the younger generations’ reluctance when it comes to purchases of assets like homes may be hurting their chances at building long-term wealth.

“What you are seeing is a delay in all the kinds of decisions that require a long-term financially stable future,” Lubell told Bloomberg. “That’s home purchases, that’s marriage and that’s having kids.”

Source: “Recession Generation Opts to Rent Not Buy Houses to Cars,” Bloomberg (Aug. 8, 2012)

As Alex reported 7/7/2012 on Property Source Radio.
Realtor.org – Daily Real Estate News | Mon, July 2, 2012
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Six Americans stand to collect up to $46.5 million for their part in helping to expose foreclosure abuses by the nation’s largest banks.

The whistleblowers helped the government expose how some banks used fraudulent documents to collect money from federal housing programs.

For their help in the lawsuits against the banks, these whistleblowers will be able to collect big paychecks due to the False Claims Act, “which allows private citizens to file lawsuits on behalf of the U.S. when they have knowledge that the government is being defrauded,” CNNMoney reports. Those who file the lawsuits stand to collect between 15 percent to 30 percent of the penalties assessed in the case.

For home owner Lynn Szymoniak, it was like winning the lottery. Szymoniak was served foreclosure papers in 2008. She helped prove banks had been using fraudulent documents to prove ownership of defaulted mortgages, for which the banks were then submitting insurance claims to the Federal Housing Administration. From the government’s $95 million award in a lawsuit, Szymoniak will get $18 million.

“I recognize that mine’s a very, very happy ending,” Szymoniak told CNNMoney. “I know there are plenty of people who have tried as hard as I have and won’t see these kinds of results.”

The other five whistleblowers came from within the industry, such as an appraiser who helped the government show that Countrywide Financial had been inflating home appraisals to collect higher claims from FHA. Other whistleblowers exposed banks overcharging veterans who had mortgages guaranteed by the Department of Veterans Affairs.

The whistleblower lawsuits helped lead to a foreclosure settlement, approved in May, between the nation’s five largest banks and state and federal officials. The settlement stems over banks’ errors uncovered in the processing of foreclosures. In the settlement, banks agreed to pay $5 billion in fines and about $20 billion in refinancing and mortgage modifications for home owners.

Source: “Whistleblowers Win $46.5 Million in Foreclosure Settlement,” CNNMoney (July 2, 2012)

As Alex reported 6/30/2012 on Property Source Radio.
Realtor.org – Daily Real Estate News | Tues June 26, 2012
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The housing slump is one of the culprits behind rising student loan debt, suggests an analysis of government data by the National Association of Home Builders.

The study reveals a shift in borrowing for higher education costs due to the housing crisis and the drop in home prices. As home prices dropped across the nation, home owners found there was less availability of home equity loans, which traditionally were often used by parents to finance higher education costs of their children. As such, more students had to take out student loans on their own, the study notes.

“The rising student loan debt problem is another consequence of the housing downturn,” says Barry Rutenberg, NAHB chairman. “As more and more parents face tighter budget restraints as a result of lower home values, this is forcing an increasing number of students to take out loans for tuition, essentially shifting some of the burden of paying for college from parents to students.”

Outstanding student loan debt has risen 47.9 percent or by $293 million since the third quarter of 2008.

“The sharp rise in student loans is due to the end of accessible home equity loans, as a result of home price declines preceding, during and after the Great Recession,” the report notes.

The report continues that “this issue is once again a reminder of the importance of housing wealth for the middle class. When that wealth declines, or otherwise becomes inaccessible (as is the case with home equity loans), it causes significant changes for the economy as a whole.”

View the report at the NAHB web site.

Source: “The Connection Between Student Loans and Housing,” The National Association of Home Builders (June 2012)