The most ambitious federal mortgage program to date aimed at millions of underwater homeowners is poised to take off in the coming two weeks, yet some key issues could hinder borrowers’ participation. One of them involves something most owners know nothing about: Who was your mortgage insurer on your underwater loan?

Though it was announced by the Obama administration late last year, the so-called “HARP 2.0″ — the second version of the Home Affordable Refinance Program — will only hit full stride around the middle of this month, when Fannie Mae and Freddie Mac finish tweaking their automated underwriting systems to accept applications, and lenders and mortgage insurance companies start handling large volumes of requests. [more]

Do you fit any of these descriptions:

– You came through the housing bust and recession far more debt-averse than you were before.
– You’ve been reluctant to consider selling your house because you don’t believe you’ll get what it’s really worth.
– Buying a new home is out of the question, even with today’s low interest rates, because it’s so difficult to qualify for a mortgage.
– You’ve gradually come to the conclusion that it’s smarter to improve the house you already own — spend some money on making it more comfortable, more up to date — and just stay put for a while. [more]

The new Consumer Financial Protection Bureau is working on a real estate issue that gets to the core of the agency’s purpose: Bringing clarity and better disclosures about the often opaque and costly fees that homebuyers, sellers and refinancers are hit with at closings.

One of the disclosures now under review might surprise you: appraisal charges. Why do they need clarifying? Doesn’t just about everybody who applies for a mortgage, whether it’s to buy a house or refinance, have to pay $450 to $600 — sometimes more — to find out what the property is worth? [more]

Though its demise drew little attention because of the partisan year-end brawl over the payroll tax cut extension in Congress, a key mortgage financing benefit disappeared at the end of December: The ability of large numbers of homebuyers and owners to write off the premiums they pay for mortgage insurance.

The loss of that tax deduction — plus mandatory new fees imposed by Congress on all new conventional and Federal Housing Administration loans — could effectively ratchet up the costs of homeownership this year. [more]

Could today’s seductive conditions in the housing market — severely marked-down prices, record low interest rates and hundreds of thousands of foreclosures waiting to be resold — be breeding new generations of the very practices that led to the crash?

In an ironic twist, there are signs that the wreckage left over from the housing bust may be reigniting dubious real estate schemes and fraud. According to researchers:

– Property flippers are back in action in places like South Florida and Las Vegas, where condo prices crashed but are now seeing appreciation again in some areas. [more]

How big a whack did your credit scores take during the grim years of economic
distress following the housing bust? Was it 20 points, 50 points, 100 points
– or maybe no drop at all?

These are key questions affecting millions of potential homebuyers who
hope to qualify for mortgages and current owners looking to refinance. New
research from a major credit-risk evaluation company suggests that the drop
in huge numbers of Americans’ scores was dramatic.

FICO (formerly known as Fair Isaac Corp.), which developed and markets the
eponymous score that dominates the home mortgage field, found that during
2008 to 2009, approximately 50 million consumers in this country saw their
FICO scores plunge by more than 20 points. Nearly 21 million of these lost
more than 50 points. Many lost 100 points or more because of the most severe
delinquencies. [more]

After a year characterized by grumpy partisan gridlock, Congress came up with a Thanksgiving
compromise that could change the mortgage choices of buyers and refinancers in more than
660 markets across the country: It raised maximum loan limits for the Federal Housing
Administration while leaving loan ceilings untouched for Fannie Mae and Freddie Mac.

In effect, this may make FHA the go-to financing option for borrowers needing loans up to
$729,750 — with down payments as low as 3.5 percent — in New York, New Jersey, high-cost areas of California, metropolitan Washington D.C., and scattered counties in other states
including Massachusetts, Florida and North Carolina. Fannie Mae- and Freddie Mac-eligible
loans in those areas, meanwhile, stay capped at $625,500.

Equally important, the new plan raises the FHA ceilings for purchasers in hundreds of more
moderate-priced markets. [more]

When you apply for a mortgage to buy a house, how often does the lender ask detailed questions about monthly energy costs or tell the appraiser to factor in the energy-efficiency features of the house when coming up with a value?

Hardly ever. That’s because the big three mortgage players — Fannie Mae, Freddie Mac and the Federal Housing Administration, who together account for more than 90 percent of all loan volume — typically don’t consider energy costs in underwriting. Yet utility bills can be larger annual cash drains than property taxes or insurance — key items in standard underwriting — and can seriously affect a family’s ability to afford a house. [more]

Is a little-publicized switch in federal mortgage policy causing huge problems for condominium
sellers, buyers and homeowner association boards across the country — even depressing prices
and blocking refinancings?

Condo industry leaders, from the 30,000-member Community Associations Institute to
individual unit owners and real estate agents, are emphatic that the answer is yes. They say a
series of rule revisions by the Federal Housing Administration has caused thousands of condo
projects to become ineligible for FHA mortgages. This, in turn, has abruptly shut off loan money
for would-be condo buyers and refinancers, forcing them to pursue conventional bank loans
requiring much higher down payments — sometimes 20 percent and higher versus the FHA’s 3.5
percent minimum — that they often cannot afford. [more]

With hundreds of thousands of homeowners facing imminent foreclosure and estimates of 2 million or more in the wings, are there any financial tools available to distressed borrowers that haven’t been tried yet? Equally important politically: Is there a way to help owners that won’t rack up huge federal expenditures and add to the deficit?

The Obama administration has been exploring options — including a new refinancing program expected later this month — but a concept has surfaced on Capitol Hill that might offer modest help with no revenue cost to the government: Amend the tax code to allow homeowners who have 401(k) retirement plans to pull out money to save their houses from foreclosure without the usual tax penalties. [more]