Bad News For HERO and PACE Programs

HERO PACE PROGRAMS IMPORTANT INFORMATION Energy Efficient Improvements What they failed to tell you...

First and foremost, FNMA, FHLMC, nor FHA will not allow these programs to remain on the title policy.  Nor will they allow to subordinate. The subordination they provide does not clear title. These programs cloud title and act like property tax bills in first position

Property owners may not be aware they can't refinance or sell with this on title

Even for a refinance, borrower might not understand the contract with this program.

As an  example of how they appear on the preliminary title report:

Assessments and other matters for the Western Riverside Council of Governments as contained

in a document entitled "Payment of Contractual Assessment Required" and/or "Notice of

Assessment" (California Hero Program), recorded March 11, 2014 , as Document No.

2014000089985 of Official Records.

The HERO and PACE programs were a great thing to reduce energy costs but they stick the property owner with a big mess When the HERO program shows on the prelim it is recorded just as the County Tax Assessor as first in line. They are a cloud on the title.

HERO – “Home Energy Renovation Opportunity” Also known as PACE “Property Assessed Clean Energy”.

These are programs offered by localities to finance residential energy improvements with loans that are generally repaid through the homeowner’s real estate tax bill.

Since they are part of the property tax bill, they remain in first position.  I spoke to FNMA today about this program and HERO’s willingness to subordinate the loan.  FNMA said that their subordination agreement is a “limited” subordination in that they are promising not to foreclosure, but since it is included in the property taxes, they remain in first position and therefore FNMA will not purchase mortgages with the HERO, or PACE (as they call it).  The borrower will need to do a cash out refinance And pay off the HERO.

Fannie Mae and Freddie Mac will NOT allow subordination agreements, they must be paid off in full to have clean title FNMA and FHLMC guides. There is a provision for PACE loans taken out prior to 7/6/10.  If you run into one of these, I would contact Loan Support for guidance.  There have been several conversations with FHA as well and they will not accept.  They too would require a cash out refinance. And pay the debt off at closing the mortgage loan.
Those people who got these programs to insulate, add energy efficient windows or solar from "government" or "county" programs usually have no idea this is a problem.
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Mortgages Fast After BK Foreclosure and Short Sale

Purchase Mortgages without Fannie Freddie FHA waiting periods!!

Buy a house after credit problems - Loan program after Foreclosure BK Short Sale Modification with  one year and two year waits

Close on your purchase then wait for the conventional 4 years or 7 years to refinance

You will need funds for down payment and reserves

Borrowers provide two years federal taxes, past sixty days bank statements, paycheck stubs past 30 days, two forms of ID and anything particular to your credit profile

Notable Program highlights include;

·         1 year seasoning for major derogatory credit events (short sales, foreclosures, and bankruptcies)

·         85% LTV to $500,000, 660 credit score, 24 months satisfactory housing

·         80% LTV to $750,000, 620 credit score, 12 months satisfactory housing

·         75% LTV to $1,250,000, 640 credit score, 24 months satisfactory housing

·         First Time Home Buyer allowed with restrictions

Hi I’m C G with Eagle Home Mortgage, A Lennar Homes Company

I want to share with you the advantages of a new conventional product we have for Borrowers with prior credit “challenges,” such as bankruptcy, short sale, or foreclosure.

In the past, if a Borrower had a foreclosure, you would need to wait three years to get a FHA loan with a list of ins and outs. FHA product is also limited by the county ceiling. For single family that might mean a loan maximum of $272,050 in Tulare County and $625,500 in Orange County.

This new program allows

85% loan to value up to $500000 loan amount

80% to $750000

And 75% to $1,250,000

There are requirements which would be best if you call me to discuss your specific situation such as:

Reserve requirements, minimum FICO score and excellent credit 12 months after the event. Terms and conditions apply, this is not a commitment to lend.

This is great news because the loan is not priced like hard money, it is a tool Borrowers can use to

Purchase a home and own during the usual waiting periods to refinance conventional when either the seven year or four year (as applies to your situation) ends. No prepayment penalties, no giant upfront costs

Call me at 949 784 9699 any day from 7AM to 7 PM Pacific time

Other credit restrictions apply and the guidelines should be reviewed carefully.  There are minimum credit standards and title to the home may not be impacted by credit items still pending.

Call me for the rules and terms

C G

(949) 784- 9699
NMLS 324982