NEW YORK (CNNMoney.com) — More than half of all homeowners with modified mortgages fell at least two months behind in their payments a year after the adjustment was made, according to a federal report released Wednesday.

However, the data also shows that modifications made in 2009, which emphasized reduced monthly payments, may perform better.

Only 40.7% of loans modified in the second quarter last year were delinquent after nine months, compared to 51.6% of those adjusted at the end of 2008, according to the report, published by the Office of Thrift Supervision and Comptroller of the Currency. More

Q.Dear LoanSafe.org, My husband and I have been trying to get a loan modification for the past year and a half and have exhausted all of our resources just to stay out of foreclosure. At this time we feel our best option may be to short sale our home and move elsewhere. However, we cannot decide whether or not we want to rent or buy a new home right away after the sale occurs, or if we will even be allowed to do so.

Our question to you is, “Can we get a mortgage after a short sale?” More

Loan Resolution Corporation has announced that the number of Home Affordable Foreclosure Alternatives (HAFA) requests assigned to it has exceeded 10,000 since April 5, the first day that the new HAFA program was implemented. Loan Resolution executives attribute the exponential growth to its quality over quantity approach to assisting homeowners avoid foreclosure. This volume is expected to double, as the U.S. Department of the Treasury recently issued new guidelines to include Fannie Mae and Freddie Mac in the HAFA program. Approximately 55 percent of the mortgages in the United States are owned by Fannie Mae and Freddie Mac, so the volume of homeowners seeking HAFA guidance will rise tremendously.

The new guidelines provide $2,200 for mortgage servicers that successfully resolve a short sale, which will incentivize even more servicers to seek the assistance of vendors such as Loan Resolution Corporation. The Scottsdale, Ariz.-based company acts as a vendor for banks implementing HAFA. Loan Resolution Corporation is working with multiple top-five banks to assist them in reducing the blight of foreclosures. More

Fannie Mae and Freddie Mac HAFA Plans: Are They The Answer We’ve Been Waiting For?

I’ll keep it no secret that I have not been exactly bowled over with the GSE HAFA program thus far. While admittedly I once thought it would finally create a smoother ride for getting short sales closed, I am still waiting…and waiting….AND WAITING!

So now it appears that Fannie Mae announced its own foreclosure prevention plan under Making Home Affordable Foreclosure Alternatives (HAFA) http://www.housingwire.com/2010/06/01/fannie-mae-announces-its-own-foreclosure-prevention-plan-under-hafa along with the Freddie Mac HAFA Initiative http://www.housingwire.com/2010/06/02/freddie-mac-details-hafa-initiative-for-distressed-homeowners

So if we are all lucky, the Fannie Mae and Freddie Mac HAFA programs will truly work the way they were designed to. At first glance it does appear to possess several positive attributes over its GSE HAFA predecessor. The Fannie Mae HAFA program takes effect August 1, 2010. Like the Treasury Department’s HAFA program a borrower must first be evaluated and denied for a Making Home Affordable Program (HAMP) workout plan. More

Many homeowners with an underwater mortgage have been asking for principal reduction plans in order to make their home more affordable or to lighten the burden that comes with owing more on a home than their home is worth. However, some lenders have been hesitant to use principal reduction options as they believe they are unfair and if a homeowner regains value in their home, a lender will be unable to increase the mortgage principal.

Lenders have been unwilling to use mortgage principal reductions for the simple fact that they feel it is a lose-lose situation for them. Homeowners stand to gain if their mortgage principal is lowered if their home decreases in value, but on the other hand, if the homeowner’s property increases than the homeowner can simply take advantage and sell their home at a prophet. Lenders argue that principal reductions on a wide scale make mortgage contracts useless. More

The Federal Reserve is poised to turn off a major money spigot that has helped sustain the ailing real estate sector, as an extraordinary program under which the Fed has pumped $1.25 trillion into the mortgage market is slated to end March 31.

“Housing has been on government life support, and without it the crash would have been much more severe,” said Mark Zandi, chief economist with Moody’s Economy.com in Pennsylvania. “This spring and summer as those policy efforts unwind, we most likely will see mortgage rates move higher and more house-price declines.”

Rather than being held by banks, today’s mortgages are sliced, diced and resold on Wall Street to create liquidity – money that then can be lent in more mortgages. After the credit crunch beginning in the fall of 2008, investors lost their appetite for these mortgage-backed securities, so the Federal Reserve stepped in to purchase them to ensure that money would keep flowing to home purchasers. More

Mortgage lenders should consider transportation costs associated with living in a particular area when evaluating whether to issue loans to home buyers, according to a new study sponsored by the Natural Resources Defense Council.

The draft report looked at trends associated with 40,000 mortgages in San Francisco, Chicago and Jacksonville, Fla. The release date for the final study has not been announced.

The research included borrowers’ income and expenses, credit scores and loan-to-home value ratio.

It focused on the average number of vehicles owned per household in a neighborhood, and through a complex formula, found that the likelihood of mortgage foreclosure increased as neighborhood vehicle ownership rates rose.  More

We’ve all heard the old saying: No Honor Among Thieves. Judging from our experience with two of America ‘s premier mortgage lenders, Wells Fargo Home Mortgage and the federally-established Freddie Mac, that saying could read: No Honor Among Lenders. You might think that, after lenders’ abusive and unwise practices, fueled by their greed, helped to trigger a financial near-disaster last year, leading lenders such as Wells Fargo and Freddie Mac might have learned something but that appears not to be the case.

What is particularly galling is the blend of incompetence and arrogance exercised by these two giants, who took multi-billions of federal tax dollars from all of our pockets, while dragging their heels on federally-supported and mandated loan modifications and other legal requirements such as the deletion of so-called Private Mortgage Insurance at once when a mortgage loan reaches eighty percent of the full initial value of a home. More

Qualifying for federally backed mortgages is about to get harder, but a Sacramento market dependent on the loans won’t stall as a result, housing industry officials say.

The Federal Housing Administration, which insures lower-income buyers, has outlined tougher lending rules starting this spring and early summer to curb rising defaults that have eroded its cash reserves. The FHA insures more than 40 percent of Sacramento County mortgages and fueled a surge in home buying as house prices fell in 2008 and 2009. More

With fixed-rate mortgages near historic lows, and the bad image hybrid mortgages have gotten as U.S. home foreclosures soar, few borrowers are interested in adjustable rate mortgages these days.

An annual report on the ARM mortgage market from Freddie Mac shows adjustable rate mortgages accounted for just 3 percent of all home purchase conventional mortgages written in 2009, the smallest share of the mortgage business for ARMS since at least 1982. More

In a move to shore up the FHA’s beleaguered balance sheet, Commissioner David Stevens on Wednesday announced big changes at the government mortgage insurer that now backs about half of all home loans to the nation’s minorities.

The FHA will raise the up-front Mortgage Insurance Premium, paid by borrowers, from 1.75 percent to 2.25 percent as well as request legislative authority to increase the maximum annual MIP that the FHA can charge. This is the second time in two years that it has raised the premium. More

David Stevens bought his first home almost 25 years ago, paying just 3% down with a loan backed by the Federal Housing Administration. “I had no money in the bank,” he says. “If it weren’t for the FHA, I wouldn’t have gotten that home.”

Now, as FHA commissioner, Mr. Stevens has to decide how many others to let through that door. Souring FHA-insured mortgages are threatening the agency’s finances. Congress is pressuring him to tighten the easy-money standards that once helped people like him, and he is expected to announce revisions as early as this week. More

The unit will target “unscrupulous” mortgage brokers and so-called redlining cases in which lenders charge more or refuse to loan money in certain areas like poorer neighborhoods or to lower income individuals, said Thomas Perez, assistant attorney general for the department’s civil rights division.

Also under scrutiny will be lenders who targeted certain products to minority communities which have led to “unprecedented numbers of foreclosures and the resulting disinvestment and blight,” he said in prepared remarks to the Rainbow PUSH Coalition’s annual Wall Street conference. More

A new unit of the Justice Department is investigating the lending practices of banks and mortgage brokers suspected of discriminating against minority borrowers.

The new Fair Lending unit is going after lenders and brokers that have unfairly denied minorities access to home loans. It’s also looking to identify companies that targeted minorities for mortgages with loose underwriting standards or high interest rates that forced them into foreclosure, said Thomas Perez, the Justice Department’s assistant attorney general for civil rights.

Penalties could include civil action or criminal charges. Perez said the unit is working with other federal bodies, including the Treasury Department, in its investigation. More