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FACT Act rules on use of medical information for consumer credit

National Mortgage Professional
Jan 03, 2006

Mortgage industry gears up to help victims of Hurricane KatrinaMortgagePress.commortgage industry, donations, waiving fees NAMB urges debt relief for victims With the scope of the devastation wrought by Hurricane Katrina coming into greater focus, the National Association of Mortgage Brokers board of directors held a special meeting on Aug. 30, where they voted unanimously to urge banks and other lenders operating in the Gulf Coast area to make special provisions for Hurricane Katrina's victims in Mississippi, Louisiana and Alabama. The four provisions that the board wants to see implemented immediately are: - A moratorium on payments for the next 90-120 days - No foreclosures for the next 90 days - A moratorium on reporting late payments to credit reporting agencies - No late payments charged or accrued for the next 90-120 days Additionally, NAMB is urging its members to contribute to the NAMB Hurricane Relief Fund in addition to giving to general relief groups. Donations to the fund will go directly to supporting NAMB members whose homes have been seriously damaged or destroyed by Hurricane Katrina. For more information, visit www.namb.org. MBA asks members to inform customers of relief options In response to the devastating affect of Hurricane Katrina, the Mortgage Bankers Association of America is urging its member mortgage companies to offer mortgage relief to borrowers who have lost their homes, suffered damage to their properties or incurred a loss of employment due to damage to their workplaces. The association is encouraging members to reach out to potentially affected customers to inform them of the relief options available to them. The following disaster relief options from Fannie Mae, Freddie Mac, FHA, Ginnie Mae and VA may be available for affected borrowers: - Temporary suspension or reduction of mortgage payments; or - In certain cases, modification of the terms of existing mortgages. For more information, visit www.mortgagebankers.org. Freddie Mac donates $10 million to support relief efforts; also offering housing expertise and mortgage relief Freddie Mac and the Freddie Mac Foundation are donating $10 million to aid organizations providing relief efforts to support the victims of Hurricane Katrina. This is in addition to a $100,000 donation that the company made to the American Red Cross earlier. Freddie Mac has also asked its mortgage servicers to extend payment relief to qualified borrowers in the areas affected by the storms, whose homes have been damaged or destroyed. "The devastation caused by Hurricane Katrina is a tragedy of tremendous proportion for our nation. As a company dedicated to helping house our nation's families, we are incredibly saddened by the extent of suffering and loss," said Freddie Mac Chairman and CEO Richard F. Syron. "For those families that still have homes, we want to help them keep their homes. And for those families who are displaced, we hope our contributions of money and resources will help ease their burden as they get back on their feet." Freddie Mac's employees are also committed to helping, and the Freddie Mac Foundation is matching their contributions, as well as doubling the match for their donations to non-profits providing shelter and housing for hurricane victims. For more information, visit www.freddiemac.com. A la mode inc. donates $400,000 to relief effort Knowing that the damage caused by Hurricane Katrina will take quite some time to repair and that it will be a long while before life in the affected areas returns to normal, a la mode Inc. is deferring all fees and payments of any kind for its thousands of clients in Louisiana, Mississippi and Alabama for as long as necessary. The company also announced that it has matched the Aug. 30 Realtors Relief Foundation donation of $150,000 in cash, split equally between the disaster recovery operations of the state Realtor associations in the three states. In addition, a la mode's founder and chairman, Dave Biggers, indicated that he will ask all of the company's clients to donate to the American Red Cross through the a la mode Web site, www.alamode.com/katrina, and will personally match the total contribution up to $250,000. "These are our clients, our neighbors and our friends, and we intend to do all we can to help. I truly hope our users donate as much as possible, so I can give the entire $250,000," said Biggers. "And if the response is overwhelming, I'll be happy to go farther. Living in Oklahoma City through bombings as well as devastating tornados, I know what sort of hospitality the nation and this industry extends during a disaster. For more information, visit www.alamode.com. Fannie Mae amends natural disaster relief procedures Fannie Mae has amended its disaster relief procedures, primarily for disbursing insurance claim proceeds. Fannie Mae has streamlined its procedures for handling insurance proceeds to provide servicers with more discretion in managing their process for the disposition of hazard (and, if applicable, flood or earthquake) insurance proceeds. These streamlined procedures are based primarily upon the status of the mortgage at the time of the disaster and the extent of the damage. The procedures have four categories that: 1. Provide servicers with more discretion to disburse funds when properties securing current mortgages have not suffered a total or near-total loss (servicers, therefore, may choose to disburse all proceeds for the repairs and restoration in a single payment, regardless of the amount, or in a series of progress payments as work is completed); 2. Increase the maximum amounts that servicers can disburse when properties securing delinquent mortgages have not suffered a total or near-total loss; 3. Provide an electronic process for mortgages 90 days or more delinquent and for mortgages in foreclosure; and 4. Address options for the disposition of insurance proceeds for mortgages that are current or 30-90 days delinquent, based upon borrowers' willingness to repair their properties. Additionally, Fannie Mae will require servicers to temporarily discontinue reporting delinquencies to credit bureaus if they are aware that the borrower's delinquency is due to hardships as a result of a natural disaster. Also, servicers may now use the reports provided by property inspectors to document the property inspections. These requirements also pertain to mortgages in bankruptcy. For more information, visit www.fanniemae.com. HUD announces Hurricane Katrina disaster assistance U.S. Department of Housing and Urban Development Secretary Alphonso Jackson has announced that he is instructing all FHA-approved lenders to provide foreclosure relief to FHA-insured families who are affected by Hurricane Katrina. The relief includes a special 90-day moratorium on all foreclosures of FHA-insured properties in the federally declared disaster areas. Jackson is also encouraging lenders to undertake actions such as mortgage modification, refinancing and waiver of late charges. "We understand the pain that these families are going through in the wake of Hurricane Katrina," Jackson said. "We are committed to giving those families the security of having a roof over their heads as soon as possible even if it's a temporary solution." Following President Bush's federal disaster declaration, HUD began providing staff to disaster field offices set up by the Federal Emergency Management Agency. HUD's initial concern is to help meet the immediate housing needs of those whose homes have been damaged or destroyed. HUD is also reaching out to its private sector partners for assistance. HUD is contacting top mortgage lenders about their inventory of repossessed homes, the homebuilding industry for help with building materials and supplying construction workers, its housing counseling network to assist displaced homeowners and the manufactured housing industry about available housing stock. HUD has also established a toll-free telephone number to answer all housing-related questions for Hurricane Katrina victims, including those regarding temporary housing, which replaces all previously issued, departmentalized toll-free numbers. That number is (888) 297-8685, and is staffed from 7:00 a.m. to 8:00 p.m. CDT, seven days a week. HUD will: - Provide temporary housing and shelter HUD will identify vacant multi-family housing, public housing units and HUD-owned homes that could be used as temporary housing for those forced from their homes; - Grant immediate foreclosure relief HUD will grant a 90-day moratorium on foreclosures and forbearance on foreclosures of FHA-insured homes; - Reprogram and accelerate federal block grants Community Development Block Grant and HOME grantees may reprogram previously awarded grants to redirect their focus to disaster recovery activities, but grantees must request the reprogram from HUD; - Provide relief for Indian housing HUD will provide Indian Community Development Block Grant funding (up to $300,000 per grantee) for disaster relief for Indian housing and tribal areas; - Provide public housing reserve for disasters and emergencies HUD has funding available for public housing authorities to help rehabilitate damaged properties; - Make available programs for damaged or destroyed properties HUD's Section 203(k) loan program enables homebuyers and homeowners who have lost their homes to finance both the purchase and/or refinancing of a house and the cost of its rehabilitation through a single mortgage. It also allows homeowners who have damaged houses to finance the rehabilitation of their existing single-family home. This program encourages lenders to make mortgages available to borrowers who would not otherwise qualify for conventional loans on affordable terms and to residents of disadvantaged neighborhoods; - Mortgage insurance for disaster victims HUD has a special mortgage insurance program under Section 203(h) of the National Housing Act to assist disaster victims. Under this program, individuals or families whose residences were destroyed or damaged to such an extent that reconstruction or replacement is necessary, are eligible for 100 percent financing; and ++Offer assistance to Ginnie Mae issuers in disaster areas Ginnie Mae will provide assistance to mortgage-backed securities (MBS) issuers with significant concentrations of loans within the affected areas. The assistance includes help in making payments to MBS investors where homeowners are unable to make payment, and eliminating delinquent loans from delinquency statistics used in risk monitoring. For more information, visit www.hud.gov. U.S. Bank establishes Hurricane Katrina relief fund U.S. Bank has established a Hurricane Katrina relief fund, which it will forward 100 percent of donations to the American Red Cross. Anyone may contribute by visiting any U.S. Bank office or branch, or existing customers may contribute by calling (800) US-BANKS. Additionally, U.S. Bank is also developing programs to assist affected retail, small business and commercial banking customers in the region. U.S. Bank representatives have committed to work with impacted customers on an individual basis to aid them in their time of need. For more information, visit www.usbank.com. Homebuilders release study on impact of Katrina Economists for the National Association of Home Builders have released a report on how the destruction spawned by Hurricane Katrina could affect the price and supply of materials. The full extent of the impact of Hurricane Katrina on the overall economy and on the housing market is still unclear, and the immediate focus is properly on human life and health, but the number of homes destroyed by this catastrophe is almost certain to dwarf the losses from any previous U.S. natural disaster. Past experience, together with the visible devastation, provides some basis for projecting the effects on construction activity, the supply and cost of building materials and construction labor, and other implications for the housing market. The number of housing units destroyed (made uninhabitable and beyond economically-justified repair) by Hurricane Andrew in 1992 was estimated at more than 28,000. The combined effect of hurricanes Jeanne, Ivan, Frances and Charley in 2004 was almost as large, with nearly 27,500 housing units destroyed, according to estimates compiled by the American Red Cross. In those cases, most of the destruction was caused by winds or the immediate force of the storm surge. The number of homes with major, but reparable damage was more than twice the number destroyed. The 1906 San Francisco earthquake/fire reportedly destroyed 28,000 buildings. Katrina also caused widespread immediate damage in Louisiana, Mississippi and Alabama, but the flooding in New Orleans, Mobile, Ala. and elsewhere is likely to translate into much larger numbers of homes destroyed. Although the floods generally did not tear off roofs, walls or cause structures to collapse, many homes will be permanently uninhabitable. The floodwaters carried contaminants that cannot easily be removed, and even if the water were clean, prolonged submersion would cause structures to be damaged beyond repair. This is likely to be the fate of a large share of the more than 200,000 homes in the city of New Orleans. Out of necessity, rebuilding will have to wait. The immediate need will be to clean up and repair damage to structures that are still viable. The repair process will absorb much of the construction labor near the affected area and several key materials that would otherwise have been used to build new homes. The materials that will be most affected include roofing and wood panels (plywood and OSB). Demand for other materials, such as concrete, is likely to decline initially, as planned projects are cancelled or delayed during the initial recovery period. The storm will have impacts on the supply of materials, as well as demand. The areas affected by the storm have a significant number of wood product facilities that may have been damaged or destroyed. On the other hand, trees that have been blown down will need to be harvested on an accelerated basis, perhaps helping to lower wood product prices in the medium term. Additionally, imports of building materials will be disrupted by the damage to port facilities. New Orleans was the top destination for imports of cement and a number of other building materials into the U.S. in 2004. Cement imports, in particular, involve the use of specialized terminal facilities. The New Orleans and Mobile customs districts reported about 12 percent of national cement imports in 2004. Congestion, caused by diversion of shipping to other ports, will also probably disrupt some supplies of materials, as will land transportation problems caused by damage to roads, rail and reload centers. From July 1992 to September 1992, largely as a consequence of Hurricane Andrew, the average price for plywood increased from about $222 per 1,000 square feet to $321, and the price of Southern pine framing lumber rose from $264 per 1,000 board feet to $308. The hurricanes in 2004 did not trigger a similar increase, and prices actually fell during the relevant period, after soaring during the preceding year. The combination of greater (partly speculative) demand and disrupted supply produced a spike in lumber and panel prices in the final days of August 2005. With production already running at full capacity for wood panels, further increases for those products, as well as for roofing, are likely. Although the loss of tens of thousands of homes implies increased demand for and construction of new homes, past experience has shown that there is no massive surge in home building in affected areas. Replacing units destroyed by the storm will not begin for many months and will take place slowly, over a number of years. In Dade County (now called Miami-Dade), the number of residential permits was 9,026, or 7.8 percent of the state total, in 1993, the year following Hurricane Andrew. That share of the state was slightly lower than the county's 7.9 percent share in 1991. By 1995, there was an increase to 14,718, or 12 percent of the state total, but that number still wasn't much greater than what might have been expected if there hadn't been a hurricane. The experiences in other areas, such as Alameda County, Calif., following the 1991 fires, and Charleston, S.C., after Hurricane Hugo in 1989, were similar. Homes were rebuilt or replaced very slowly. For more information, visit www.nahb.org.
Published
Jan 03, 2006
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