Certified Mortgage Planner

Word of the Day – Modify

It seems as if every news item surrounding the housing market entrenches the word modify. Therefore, what does modify mean. According to Dictionary.com Unabridged (v1.1) the word modify is defined as:

1. to change somewhat the form or qualities of; alter partially; amend: to modify a contract.
2. to reduce or lessen in degree or extent; moderate; soften; to modify one’s demands.

Every piece of legislation has been modified in the last 24 hours to buoy the housing industry and frustrated homeowners on the brink of foreclosures. Let’s take a look at some of the prominent headlines.

• HOPE for Homeowners Program of the Home Economic Recovery Act 2008, which became effective October 1st has had minimal participation. It was noted that only 42 applications out of the 400,000 the program was targeted were received in the first 2 weeks. Accordingly, the program is in the process of being modified to be more friendly to banks to want to move forward. NY Times, Nov. 12, 2008
• Henry Paulson announced today that the $700 Billion TARP Program was being modified to be more accommodating to the changing needs of the financial market. Paulson stated “Over these past weeks we have continued to examine the relative benefits of purchasing illiquid mortgage-related assets. Our assessment at this time is that this is not the most effective way to use TARP funds, but we will continue to examine whether targeted forms of asset purchase can play a useful role, relative to other potential uses of TARP resources, in helping to strengthen our financial system and support lending. But other strategies I will outline will help to alleviate the pressure of illiquid assets.” CNBC, Nov 12, 2008
• Streamlined Modification Program was announced yesterday by the Federal Housing Finance Agency in conjunction with the efforts of major banks. The objective is for servicers to take a proactive approach to assisting homeowners who are in risk of losing their homes. The main purpose of the program is to create a managable housing payment no greater than 38% of total debt to income. MarketWatch, Nov. 11, 2008
• The Department of Housing and Urban Development today New Mortgage Rules to curb costs and provide greater clarity of fees. Not only is the Good Faith Estimate and the HUD-1 Settlement Statement getting a modified look, but also a 10% cap on the adjustment of certain fees from the initial estimate. The new rules go into affect January 1, 2010. HUD No. 08-175

With all of the changes throughout the legislation landscape, you must wonder if the consumer is really being serviced. It is tough enough for professionals to absorb and comprehend the impacts of all the changes. Does Congress and Capitol Hill honestly believe that consumers have a clue on how they can initiate and benefit from all of the legal modifications?

Certified Mortgage Planner

The Barath Group

…was created with the specific purpose to help homeowners achieve their dreams. We lend with integrity, customer centricity and competitiveness. Our product is ADVICE. Our special valued service is a TEAM approach through a growing synergy of influence. Our competitive edge is a qualified staff of Certified Mortgage Planning Specialists. We are trusted mortgage planners to an ever-broadening base of clients nationally.

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