BuyandClose.com Blog

Therefore, it would be up to the Secretary of Housing and Urban Development to determine the median home price for different housing markets “as soon as practicable,” but no later than 30 days after passage of the bill, relying on existing commercial data where needed. In other words, if median home prices in your marketplace are $336,000 or less, this bill won’t really affect you; and there’s no way to tell if median home prices in your area are higher than $336,000 until HUD publishes this data. Nevertheless, it appears that some form of jumbo relief is certainly on the way. An increase in the conforming loan limit coupled with the property tax relief that Florida voters passed last night is sure to wake some of the sleepy “move up” buyers from their slumber. Additionally many current homeowners will be able to refinance their “jumbo” mortgage into much lower rate conforming loans providing for additional relief.

In order to make higher limits a reality, the next step is for the Senate to pass the bill and for the President to sign it into law. The target date for final passage set by the White House and Congressional leaders is February 15, so let’s hope for the best and I will be sure to keep you posted as we have more information.

For all that’s been said about the bailout of Countrywide by Bank Of America, what’s not getting talked about is how the merger will impact existing Countrywide customers. The short answer is that it won’t. A mortgage (and its corresponding note) is a legal contract between the lender and the lendee, signed on the date of closing. It is binding and cannot be altered by either party, even if the mortgage is transferred between lenders. As a homeowner, the only way to “end” the contract is to satisfy the home loan with a full repayment.  That can happen one of three ways:

1. The home is sold and the mortgage is repaid
2. The home is refinanced and the mortgage is repaid
3. The home loan is paid down to $0 balance by the homeowners

Mortgage payment servicers commonly transfer home loans between each other.  This happens on an everyday-basis — not just when there’s a merger, or a closure.  When mortgages are transferred, HUD requires the former lender to send a 15-day advance notice to its lendee; the new lender is required to send a similar notice. So, for homeowners that write their mortgage checks to Countrywide every month, it’s possible that the address to which you mail your payment may change, but the terms of your mortgage cannot. (Image courtesy: The Wall Street Journal Online)