Feds Streamline Mortgage Applications for Massachusetts Homeowners
The federal Department of Treasury announced new guidelines to streamline mortgage application processes for all mortgage applicants, including those in Boston and Massachusetts who apply for a mortgage associated with Fannie Mae or Freddie Mac. Our bankruptcy clients often are not able to save their homes because interest rates, and other costs, are just too high.
Beginning June 1, under the new regulations, the lenders will be required to obtain all necessary documentation at the outset, thus saving confusing and rejection later on. Further, some lenders require the collection of documents twice; this will save that step. The lenders will now require two pay stubs and a release so that the lender can go on-line and obtain a tax return from the IRS. Since the program began there have been 900,000 mortgage modification applications – unfortunately, only 1100,000 have been approved. December data shows an improvement in the rate of approvals.
These changes follow the news that mortgage delinquencies are up at both Fannie Mae and Freddie Mac The news at Frannie May is that it will cut prices: home buyers will received 3.5% of the final sales price toward closing costs or appliances. Whether it is the best time to buy in Massachusetts is a personal decision; the feds are trying to make it easier. Nevertheless, be careful when applying for loans, including mortgages: follow our advice regarding keeping your credit scores high for the best interest rates from your lender.