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Socal ... I marked my calender, waited patiently with my list of those in need and ...
NADA
I have 2 words for Obama and his Fannie Mae 105% bail out plan ...
OPTION ARM!
Call Me Obama ... we need to talk!
- jimmy57
- Contributions:1511
It's a mess, a waste of taxpayer money. Not enough borrowers will qualify to make much of a difference. The foreclosures and short sales of those who don't qualify (including non-occupied, too-far upside-down, lied about income, etc.) will continue to drive down sales comps.
Even some of those who enter in program will likely default in the future as the value of their house continues to fall. For them it will only have been a postponement.
Even some of those who enter in program will likely default in the future as the value of their house continues to fall. For them it will only have been a postponement.
- Andrew Adams, "203K Specialist"
- Contributions:9349
I know without even thinking about it 3 borrowers that I have spoke to this week that may benefit from refinancing.
There are plenty of folks that had more than 20% equity in their homes that would like to refinance but the addition of MI negates the benefit.
There are plenty of folks that had more than 20% equity in their homes that would like to refinance but the addition of MI negates the benefit.
- SoCal_Engr
- Contributions:5667
I believe it will take a while for people to try and refi under this plan. For those that do wait, hopefully their home values won't drop enough to bump them over the 105% LTV on the first.
For those already over 105% LTV, or with ticking 2nds and 3rds, my belief is they're hoping to do a mod. I'm afraid that many may think the lenders will be forced to modify under the plan, not "encouraged".
For what it's worth, the relaxed refi guidelines for 105% LTV on the first is one of the less egregious elements of the plan. Assuming people can qualify under this, then it's likely they were not the worst offenders of the "in over your head" buyers with uber-creative financing.
My fear is that people will soon realize how few people are really going to be able to do anything under the current guidelines, and then there will be a cry to relax the guidelines even further. The current plan is the first step on a new journey across the same slippery slope that got us into this mess.
For those already over 105% LTV, or with ticking 2nds and 3rds, my belief is they're hoping to do a mod. I'm afraid that many may think the lenders will be forced to modify under the plan, not "encouraged".
For what it's worth, the relaxed refi guidelines for 105% LTV on the first is one of the less egregious elements of the plan. Assuming people can qualify under this, then it's likely they were not the worst offenders of the "in over your head" buyers with uber-creative financing.
My fear is that people will soon realize how few people are really going to be able to do anything under the current guidelines, and then there will be a cry to relax the guidelines even further. The current plan is the first step on a new journey across the same slippery slope that got us into this mess.
I am now on a journey to find the 3 people this plan will help.
I must have missed the part where they address how they deal with the MI companies pulling back on insuring TPO ... refis at 105% should be a breeze!
I must have missed the part where it addresses the part that exempts those that went in with 20% down from having to refi with MI and thus making it worthwile. (If it's in there, please direct me to it ... I admit I got bored and quit looking)
It does not address the Wold Savings/Wachovia "Pick a Pay" and other creative financing option ARMs that are NOT Fannie products, and ready to explode. These are the people that really need some relief and are not even addressed.
When will they actually ask those of us in the trenches, that have to answer the phone and explain it all, what is really needed to "fix" this?
I must have missed the part where they address how they deal with the MI companies pulling back on insuring TPO ... refis at 105% should be a breeze!
I must have missed the part where it addresses the part that exempts those that went in with 20% down from having to refi with MI and thus making it worthwile. (If it's in there, please direct me to it ... I admit I got bored and quit looking)
It does not address the Wold Savings/Wachovia "Pick a Pay" and other creative financing option ARMs that are NOT Fannie products, and ready to explode. These are the people that really need some relief and are not even addressed.
When will they actually ask those of us in the trenches, that have to answer the phone and explain it all, what is really needed to "fix" this?
- SoCal_Engr
- Contributions:5667
AA,
From your post, I am assuming that you are referrng to people who used to have 20% or more in equity, but now do not...and so any benefit from a refi would be negated (at least, in the near term), by the addition of PMI. And, with the current declining market, it would not be realistic to assume that the PMI would go away anytime soon due to rising values.
However, I don't see where the refi section of the stimulus plan does anything to address the PMI issue. It simply increases the LTV on the first to 105%. Unless I'm missing something, PMI would still apply and the people you are referring to won't be helped (i.e., be able to refi above 80% LTV without PMI).
???
From your post, I am assuming that you are referrng to people who used to have 20% or more in equity, but now do not...and so any benefit from a refi would be negated (at least, in the near term), by the addition of PMI. And, with the current declining market, it would not be realistic to assume that the PMI would go away anytime soon due to rising values.
However, I don't see where the refi section of the stimulus plan does anything to address the PMI issue. It simply increases the LTV on the first to 105%. Unless I'm missing something, PMI would still apply and the people you are referring to won't be helped (i.e., be able to refi above 80% LTV without PMI).
???
"Unless I'm missing something, PMI would still apply and the people you are referring to won't be helped (i.e., be able to refi above 80% LTV without PMI)."
Not only will they not be helped if they actually were dumb enough to refi with MI, they probably could not refi anyway given the current state of the MI companies with third party originations. Anyone checked the status of Radian lately? It does not look good!
This is a systemic problem that lip service will not fix! The "plan" is a joke!
$.03 ... I usually give only 2 but I'm feeling extra generous!
Not only will they not be helped if they actually were dumb enough to refi with MI, they probably could not refi anyway given the current state of the MI companies with third party originations. Anyone checked the status of Radian lately? It does not look good!
This is a systemic problem that lip service will not fix! The "plan" is a joke!
$.03 ... I usually give only 2 but I'm feeling extra generous!
- Andrew Adams, "203K Specialist"
- Contributions:9349
I have seen nothing in regards to refinance guidelines. I will have to reserve my response until those guidelines come out or....more likely agree with Gregorio that is was much adoo about nothing!
You always agree with me Andrew ... you either say so explicitly or your silence speaks volumes!
- Andrew Adams, "203K Specialist"
- Contributions:9349
More often than not...you are correct about my silence.
- patmondor
- Contributions:6
Wow. Thanks for this thread guys! I posted my situation earlier ("Conforming or not-conforming????"). I put 25% down in Sep '05, but foreclosed comps in my area has driven me to 90%. Thus, 3.5 years ago I wasn't under MI, now if I refi I would be under MI, mitigating any benefit of the refi. I can pay my mortgage without issue, I simply would like to lower my payment to increase liquidity. It seems nothing in this plan addresses those that where not under MI when the loan started, but with the market the way it is (and those foreclosed comps...thanks!) now find themselves in a MI situation. Very sad.
"you are correct about my silence."
I always knew you were a smart guy!
I always knew you were a smart guy!
- Rob Cochems
- Contributions:3523
Why would you bother to refinance when you can claim a hardship and get 2%??????????
- Rob Cochems
- Contributions:3523
I must have missed the part where it addresses the part that exempts those that went in with 20% down from having to refi with MI and thus making it worthwile. (If it's in there, please direct me to it ... I admit I got bored and quit looking)
Gregorio,
You ask and you shall receive...
Most borrowers refinancing an existing Fannie Mae loan will not be required to buy new or additional mortgage insurance if the loan at the time of the refinance is more than 80 percent of a home's value. Any existing mortgage insurance may be carried forward to the new loan
Beginning in April, all 1,600 lenders and 29,000 mortgage brokers using Fannie Mae's Desktop Underwriter® platform will be able to process an application to refinance any existing Fannie Mae loan, allowing for greater lender origination capacity and easier refinancing for borrowers.
Link
Gregorio,
You ask and you shall receive...
Most borrowers refinancing an existing Fannie Mae loan will not be required to buy new or additional mortgage insurance if the loan at the time of the refinance is more than 80 percent of a home's value. Any existing mortgage insurance may be carried forward to the new loan
Beginning in April, all 1,600 lenders and 29,000 mortgage brokers using Fannie Mae's Desktop Underwriter® platform will be able to process an application to refinance any existing Fannie Mae loan, allowing for greater lender origination capacity and easier refinancing for borrowers.
Link
Excellent Rob As usual! How do we get you on the Cali lTop lender board instead of the fraud (in my opinion) national bank of KC et al?
- mikefarinha
- Contributions:182
Rob,
I have a question.
Under that link you posted the "Home Affordable Refinance" doesn't say it requires the home has to be your primary residence. I'm looking to refinance a house I couldn't sell and subsequently rented out.
While I doubt it, do you think any of these programs would fit into my situation?
I have a question.
Under that link you posted the "Home Affordable Refinance" doesn't say it requires the home has to be your primary residence. I'm looking to refinance a house I couldn't sell and subsequently rented out.
While I doubt it, do you think any of these programs would fit into my situation?
- Rob Cochems
- Contributions:3523
Mike,
The refinance program is available to investment properties. However, it will be a bit more expensive then if it were a primary.
Depending on your Loan to Value, you will pay an addition 1.75 to 3.75 points to obtain the refinance.
The refinance program is available to investment properties. However, it will be a bit more expensive then if it were a primary.
Depending on your Loan to Value, you will pay an addition 1.75 to 3.75 points to obtain the refinance.
- SoCal_Engr
- Contributions:5667
"The refinance program is available to investment properties."
???
On the USG website, the first question asked for refi under the plan is "Is this home your primary residence?". Only by answering "Yes" to this question, can you move forward to finding out about how to pursue the refi. Other "Yes" questions are "Is it FannieMae or FreddieMac", "Are you current", and the 105% LTV guestimate.
I'm not sure how you're finding that the program applies to investment properties.
Here's the LINK
???
On the USG website, the first question asked for refi under the plan is "Is this home your primary residence?". Only by answering "Yes" to this question, can you move forward to finding out about how to pursue the refi. Other "Yes" questions are "Is it FannieMae or FreddieMac", "Are you current", and the 105% LTV guestimate.
I'm not sure how you're finding that the program applies to investment properties.
Here's the LINK
- Rob Cochems
- Contributions:3523
Hi Socal,
I went to the source Fannie Mae, they will accept all property types
Link
Bottom of page 7 top of page 8.
I went to the source Fannie Mae, they will accept all property types
Link
Bottom of page 7 top of page 8.
- SoCal_Engr
- Contributions:5667
Rob,
I saw what you saw. Question now is, does the USG know what the rules are? From the financialstability.gov website, I'd have to say "no".
I saw what you saw. Question now is, does the USG know what the rules are? From the financialstability.gov website, I'd have to say "no".
- Andrew Adams, "203K Specialist"
- Contributions:9349
This stuff is comming out fast and furious so don't expect it to be 100% correct. I would rely on Fannie to be accurate, since they will be the ones buying the loans.
- Rob Cochems
- Contributions:3523
- Justin Sheftell, "Courtesy Mortgage"
- Contributions:3428
Rob, are you sure?
I thought by definition the government is always correct.
I thought by definition the government is always correct.
- Rob Cochems
- Contributions:3523
lol,
It looks like the USG should read what Treasury wrote for guidelines. No where does it mention that the refinances have to be owner occupied.
I'll take Fannie and Freddie's word.
It looks like the USG should read what Treasury wrote for guidelines. No where does it mention that the refinances have to be owner occupied.
I'll take Fannie and Freddie's word.
When you all sort it out .. let me know!
- Justin Sheftell, "Courtesy Mortgage"
- Contributions:3428
It took government 3-4 weeks to sort out, so we should have it figured out by tomorrow morning.
- bucks77
- Contributions:1
Do any of these proposed refinancing benefits under the Obama stimulus package apply to homeowners who have been laid off? Â I am now unemployed and don't see how I could refinance anyway if I told my lender I don't have a job anymore. Â Any thoughts?Â
- fmlflorida
- Contributions:47
I am confused. From the above discussion, it sounds like everyone believes that borrowers exceeding 80% LTV will still have to carry PMI under this program. I read the text below (from the link above from the Fannie Mae website) and interpret it as (my additions in brackets)....
Most borrowers refinancing an existing Fannie Mae loan [under the Making Homes Affordable Refinancing Option] will NOT be required to buy new or additional mortgage insurance if the [new] loan at the time of the refinance is more than 80 percent of a home's value [, in contrast to the current policy that PMI is required for all loans over 80% LTV]
In other words, I'm hoping that they're relaxing PMI requirements in this program (as well as reducing fees/costs associated with closings). Maybe wishful thinking on my part. I'm not a pro like many of you, but it's easy to see that if all they do is change the 80% cap to 105% with no other changes, that's not really going to help a lot of people.
Most borrowers refinancing an existing Fannie Mae loan [under the Making Homes Affordable Refinancing Option] will NOT be required to buy new or additional mortgage insurance if the [new] loan at the time of the refinance is more than 80 percent of a home's value [, in contrast to the current policy that PMI is required for all loans over 80% LTV]
In other words, I'm hoping that they're relaxing PMI requirements in this program (as well as reducing fees/costs associated with closings). Maybe wishful thinking on my part. I'm not a pro like many of you, but it's easy to see that if all they do is change the 80% cap to 105% with no other changes, that's not really going to help a lot of people.
- NowhereMan
- Contributions:13
I benefit from this plan. When I applied for my mortgage after cost my LTV was 85.7%. So I paid PMI and figured after two years I could get the additional $174 PMI removed. But now, because of market conditions my LTV is 96.9%. So if I can refi and eliminate $2100/yr going to GenWorth Financial for insurance that will never be needed, well then by god I'm going to do it.
- NowhereMan
- Contributions:13
I benefit from this plan. When I applied for my mortgage after cost my LTV was 85.7%. So I paid PMI and figured after two years I could get the additional $174 PMI removed. But now, because of market conditions my LTV is 96.9%. So if I can refi and offest the $2100/yr going to GenWorth Financial for insurance that will never be needed, well then by god I'm going to do it.
What Benefit is Refinancing Under the Stimulus Plan?
From what I've seen, the majority of the refi benefit under the plan (a) is only for the first, and (b) is restricted to those with firsts no-more-than 105% of LTV. What good is this really going to do?
Many of the people who are in trouble jumped in with less than 10% down, or an 80-20 or 80-10-10 or some other aberation of a financing Gordian knot.
In the case of minimum downs and high LTV firsts, what is the realistic chance that these owners are going to meet the 105% LTV requirement?
In the uber-creative 80-20 or 80-X-X situations, what real benefit will be achieved if it's the rates/terms of the 2nd/3rd that are going to drive the owner under? Or, given that the holders of the 2nd/3rd are likely to get nothing when the owner defaults anyway (since refi of the first is only a portion of addressing their overall financial situation), why shouldn't the lenders simply refuse to re-subordinate and hope for a miracle?
Even though I am generally against the USG bailouts, I think (hope?) that some homeowners will be helped by the ability to refi at 105% LTV. However, I really think that most either (a) won't qualify, or (b) will go under anyway due to an inability to address their piggyback loans. About the only "good news" is that some in the mortgage business will get to make money off of loans that can now be approved under these relaxed guidelines (hmmm...sounds vaguely familiar).
Thoughts from the pros?
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