St Louis Finance News: Loan Delinquencies May Be Slowing For HFAs
News Press Hot Line: 314-334-0210 | Floyd Tapia

In the first quarter of 2010, state housing finance agencies’ (HFAs) delinquencies declined for the first time since overall performance of loans began to deteriorate in the second quarter of 2008, according to Standard & Poor’s.

But analysts at the credit ratings agency say the slowdown could be only temporary.

According to S&P’s study, delinquency rates for HFA loans remain high with an average increase of 1.67 percent from the first quarter of 2009 to the first quarter of 2010.

However, the company’s analysis indicates that the overall percentage of HFA loans at least 60 days delinquent or in foreclosure decreased to 6.05 percent in Q1, down from 6.57 percent in the fourth quarter of 2009.

S&P notes that declining home prices have been a significant factor in rising delinquency rates, as homeowners either have limited options for selling their residence or refinancing their loan, or simply decide not to continue making payments on an asset that is continuing to lose value.

And all market indicators point to the probability of home price declines returning now that the home buyer tax credit has ended and home sales have nosedived.

According to David Wyss, S&P’s chief economist, difficulties restructuring loans and the delays in the foreclosure process will likely lead to bringing foreclosed homes on the market for another 18 months, which will also put more pressure on home prices and lead to an increase in delinquencies for HFA portfolios.

“We expect that HFA delinquencies will likely remain high without a decrease in unemployment and economic improvement,” S&P said in its report.

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When applying for any type of St Louis mortgage, call Liberty Lending Consultants, the recognized St Louis home loan and refinancing experts, at 877-334-0210 and ask for Steve Swan or Doug Stahlschmidt.

For business owners looking for small business loans and alternative financing that works, call Floyd Tapia, host of the St. Louis “Mortgage Minute” at 314-334-0210. He is a successful hedge fund originator assisting local and national business owners in getting private and public St Louis finance and commercial lending with no upfront fees.

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News: No USDA Loans Is Bad News for Home Buyer Tax Credit Recipients - (News Hot Line: 877-334-0210)

Once upon a time, their existed a federal mortgage program from the United States Department of Agriculture that would guarantee low down payments, no down payments and low interest rates for rural home buyers.

However, with the stringent mortgage lending requirements facing would be homeowners today, tens of thousands of potential buyers have been ushered into this program with promises of a better life, a better home loan in a land not so far away.

And according to federal banking statistics, in 2006, the USDA program backed about 31,000 loans or $3 billion worth.  And then in 2009, that number had grown to 133,000 loans worth approximately $16.2 billion.

What about qualifications for this program?  The standards for qualifying for these home loans were rather tight and the default rates were far better than the FHA which was good news according to St Louis mortgage experts.

Now for the bad news:  This program was never meant to handle that many loans and due to this run on this stimulus package, they ran out of money.

To rectify this unfortunate situation, members of Congress are in the process of appropriating more funding for this successful program.  In fact, the House passed a bill sponsored by Congressman Paul Kanjorski of Pennsylvania.

The Senate also passed a bill out of the Appropriations Committee which was sponsored by Sen. Michael Bennet of Colorado.

But the frustrating thing seems to be that while all this is optimistic news, at present, one still cannot get a St Louis home loan from the USDA.

So, homeowners who have picked their new home and filled out all needed paperwork by said deadlines are anxiously awaiting news from Capitol Hill as to when more funding will be available.

Although these appropriation bills are expected to be signed and passed, it still remains uncertain when these monies will be available which now presents a big problem for the home buyer tax credit applicants.

Keep in mind, buyers have to close by June 30th.  And many of these home loan applicants are depending on these USDA loans.  They signed binding contracts by the end of April 30th, and now they are pretty much in limbo.

Remember, the promise of funding still does not make for a legal home loan contract.  And what makes matters worse, these larger banking institutions are not budging.  They feel it is necessary to wait and make certain that these new appropriations are in essence, a done deal.

This of course is not making the job for lenders, mortgage brokers and real estate agents any easier nor are they staying optimistic about this ordeal ending in a win-win situation for them or their clients.

But the one thing mortgage news analysts strongly agree on is that by the time Congress passes this new funding, there will be a massive backlog of borrowers who may never get their home mortgage by the June 30th closing.

This presents an unprecedented loss to these home buyers who will not just lose their new home of choice, but will also miss this tax credit all together not to mention losing these historically low interest rates that may not reappear for a very long time.

The true irony of this mortgage debacle is that a consumer can do all that is required of them to buy a home only to see the government missing the fiscal boat once again by holding up its own housing stimulus.  How disappointing.

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When applying for any type of St Louis mortgage, always discuss your options with a top St Louis mortgage broker. Call Liberty Lending Consultants, the recognized St Louis refinancing and home loan experts, at 877-334-0210 or 314-334-0210 and ask for Steve Swan or Doug Stahlschmidt.

Or call our known syndicated columnist Floyd Tapia at 314-698-4092 or 877-334-0210, host of the St. Louis “Mortgage Minute” and successful hedge fund originator assisting local and national business owners in getting private and public St Louis commercial lending with no upfront fees.

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Check back daily for more financial news.