From the Housing and Urban Development Website:

WASHINGTON - U.S. Department of Housing and Urban Development Secretary Shaun Donovan today announced the Federal Housing Administration (FHA) has implemented changes to its loan modification program to ensure consistency with the Obama Administration’s Home Affordable Modification Program. By August 15, FHA borrowers will be able to significantly reduce their monthly mortgage payments by seeking a loan modification through their current mortgage company or loan servicer under the new FHA-Home Affordable Modification Program (FHA-HAMP).

“Today, we’re bringing another important tool to the table to help struggling families who are desperate to keep their homes,” said Donovan. “Tens of thousands of FHA borrowers will now be able to modify their mortgages in the same manner as so many others who are taking advantage of the Administration’’s Making Home Affordable program. This is just the latest tool we are providing to help homeowners prevent foreclosures through the Making Home Affordable program. Earlier this month we announced an expansion of the Home Affordable Refinance Program to borrowers who are up to 125 percent underwater. Together, these actions will significantly increase the help available to homeowners.”

The Helping Families Save Their Homes Act of 2009, signed into law on May 20, allows FHA to give qualified FHA-insured borrowers the opportunity to reduce their monthly mortgage payment by modifying the mortgage through FHA-HAMP. FHA released the program’s implementation guidelines today. FHA expects all servicers to implement the changes by August 15. The program permanently reduces a family’s monthly mortgage payment through the use of a partial claim, which defers the repayment of mortgage principal through an interest-free subordinate mortgage that is not due until the first mortgage is paid off.

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Qualifying for a jumbo loan—loans higher than the conventional conforming loan limit of $729,750—is more difficult than it was a few years ago.

While rates on jumbo mortgages have historically been higher than rates on conforming loans, jumbo loans are still available, but often require the borrower to jump through several hoops and pay more for them.

Prior to the credit freeze, borrowers of jumbo mortgages could qualify for loans with a 5 percent down payment, credit scores of 620 and enough money in the bank to cover two months of payments. Now, borrowers typically must have six months’ reserves, a 700+ credit score and a down payment of at least 20 percent.

Securing a Jumbo: No Small Task [New York Times]

The Obama administration’s $75 billion foreclosure prevention effort is unlikely to succeed because mortgage lenders cannot turn a profit on modified loans, concludes a new report by the Federal Reserve Bank of Boston.

Analyzing 665,410 loans originated between 2005 and 2007 that subsequently became seriously delinquent, the Boston Fed found that only 3 percent of borrowers had their loans modified to lower monthly payments, and about 5.5 percent received workouts that did not result in lower payments.

Also, up to 45 percent of approximately 150,000 borrowers who received some kind of aid ended up in arrears again, but about 30 percent of delinquent borrowers were able to fix their problems without help from their lenders.

Lenders avoid redoing loans, Fed concludes [Boston Globe]

There have been rumors circulating for months that banks are holding on to thousands of foreclosed properties so that they don’t flood the market to further depress prices.  Over the last few weeks however, those rumors have started to surface from credible sources, including The Washington Post, where Renae Merle takes a closer look at a family that wants to foreclose, but can’t due to the bank back-log.  Some would argue that we have not yet seen the bottom of the housing slump and if investors are looking for opportunities to purchase foreclosed property, all they have to do is sit tight and wait for more distressed property to hit the market.

The backlog of seriously delinquent mortgages, which so far affects about 1 million borrowers, is a shadow over hopes for a rebound in the nation’s housing markets. It masks the full extent of the foreclosure crisis and threatens to depress prices even further just as some parts of the country are hinting at recovery. For lenders, it could portend even more financial losses tied to the mortgage meltdown.

Not Paying the Mortgage, Yet Stuck With the Keys [The Washington Post]

To stimulate the housing economy, the federal government tried motivating first time home buyers by issuing an $8,000 credit to the buyer if they met certain criteria.  When it comes to purchasing a first home, every little bit counts, so this credit is a welcome one, but since lending practices have changed so drastically this year, it should be noted that the $8,000 credit cannot be used towards a down-payment of a loan.  Since a down-payment is now a required variable to obtaining a loan (years ago, practically all you needed was a pulse and social security number), here are a couple of tips to help you come up with a down-payment.

1. Get a gift from a relative
2. Use your 401(k)
3. Sell something
4. Change your withholding rate
5. Obtain seller credits
6. Create a stringent savings plan

Click here to see the above tips in more detail.  The above tips are just that, tips, so you should speak with your tax adviser and mortgage broker before you make any financial decision.

First Time Homebuyers get $8,000 Tax Credit After Closing–How To Come Up With the Cash for Down Payment Now [Illinois Mortgage Rates and News]