FHA retreats on tough new credit rules for borrowers

FHA retreats on tough new credit rules for borrowers

In a policy switch that could be important to thousands of applicants seeking low-down-payment home mortgages, the Federal Housing Administration has rescinded tough new credit restrictions that had been scheduled to take effect this Sunday.

The policy change would have affected borrowers who have one or more collections or disputed-bill accounts on their national credit-bureau files, where the aggregate amounts were $1,000 or greater.

Some industry experts estimate that if the now-rescinded rules had gone into effect, as many as one in three FHA loan applicants would have had difficulty being approved.

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Bank of America tries renting to distressed homeowners

Bank of America tries renting to distressed homeowners

Unable to qualify for modifications on Bank of America mortgages, a few of California’s most distressed homeowners are being offered one last chance to stay in their homes: Become renters instead.

Testing a mortgage-to-lease program in the Golden State, Bank of America sent 300 letters last week inviting borrowers without other options to apply. An additional 1,500 letters will go out in the next few weeks as the bank, which also is testing the program in Arizona, Nevada and New York, evaluates whether a national rollout is feasible.

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Mortgage-aid revisions paying off for bankers, some borrowers

Mortgage-aid revisions paying off for bankers, some borrowers

A newly streamlined government plan to reward homeowners who diligently pay their underwater mortgages is proving a bonanza for banks, which by one estimate may pocket $12 billion in extra revenue by refinancing loans.

The revisions to the Obama administration’s 3-year-old Home Affordable Refinance Program have yielded mixed results for homeowners, analysts and mortgage professionals say.

Some responsible homeowners are indeed getting lower-interest loans despite owing far more than their homes are worth. But others have loans that don’t qualify, or must jump through hoops the plan was supposed to eliminate, such as on-site appraisals and extensive paperwork.

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Consumer watchdog weighs limits to mortgage fees

Consumer watchdog weighs limits to mortgage fees

The government’s consumer-finance watchdog is weighing an overhaul of the fees consumers pay to obtain mortgages.

Regulators might ban origination fees that vary with the size of the loan, known as “origination points.” They also might limit the use of “discount points” that are supposed to result in lower interest rates, the Consumer Financial Protection Bureau said late Wednesday.

The changes would help consumers understand the fees they are paying and guarantee that the fees provide any promised discounts, the agency said.

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BofA initiates home loan modification offers

BofA initiates home loan modification offers

Homeowners with a Bank of America mortgage have good reason to check their mailbox.

The lender said Tuesday it has begun mailing out letters to customers who may qualify to have their home loans reduced as part of a multistate settlement over alleged foreclosure abuses…

Some customers could receive letters from the bank as early as this week that invite them to provide financial information as part of a review process for the program. The bank plans to have mailed out most of the letters by the end of the third quarter.

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