Skip to comments.Five Ways the White House Is Changing Federally Backed Mortgages
Posted on 10/25/2011 10:39:03 AM PDT by WOBBLY BOB
President Obamas message to spur the economy has changed from pass this bill to we cant wait. And mortgage rates are the impatient administrations first target. Rather than waiting for congressional action to improve the outlook for homeowners, the White House is making it easier to refinance loans backed by the Home Affordable Refinance Program. Though the executive branch cant legally reach into the practices of private lenders, here is a look at a list of changes (and nudges) the administration plans to implement beginning on Nov. 15:
(Excerpt) Read more at nationaljournal.com ...
we cant wait.
“you have to pass the bill to see what’s in it.”
“It’s not my fault”
“federally backed mortgage” and “government student loan” are two of 1,000+ things that should not exist.
The five changes come down to making lenders give new mortgage loans to people who are way underwater on the value of the property to what they owe, have no chance of paying the new lender and get a chance to flip and sell a bad deal they made before the crash. Better to just let the usual foreclosure and bankruptcy process solve the problem. Instead, Pres. Barry Soetoro is putting we savers and taxpayers on the hook for other’s mistakes.
The housing market will never find it’s true bottom unless the gubmint stops reinflating the bubble.
Allowing refinancing up to 125% loan value is another typically Obama-Fwank moronic thing to do.
The people getting the 125% will not pay off their mortgage. They will buy lots of new stuff, go out to eat, go on vacation, etc.
I have seen this happen over and over for years, now. Every time these types are allowed a refi, they just go deeper into debt. I just heard about someone who deliberately set a fire to gut a house where they were behind in the payments. They got a huge insurance payout, upgraded everything by 100% or more, bought toys and ended up deeper in debt. They are on the 4th reiteration of this game and just never learn or want to.
Though the executive branch cant legally reach into the practices of private lenders, here is a look at a list of changes (and nudges) the administration plans to implement beginning on Nov. 15:
1.Eliminating the ceiling: Currently, borrowers can owe no more than 125 percent of the value on their home to qualify for refinancing under HARP. The new requirements will eliminate that ceiling, but it will take congressional action to blow out the floor that requires borrowers to owe more than 80 percent before they qualify for a refinance. According to Corelogic data and analytics, 4.7 million Americans owe more than 125 percent on their homes.
2.No-equity requirement: The HARP program began with the intention of making refinancing available to homeowners with little equity. Now, in the effort to widen the program's reach, homeowners with no equity at all will be able to refinance.
3.No new property appraisal required: To qualify for HARP, borrowers had to undergo an application process that included a home appraisal from the federal authority. Now, in an effort to streamline that process, homeowners can apply for loans on new properties without an appraisal.
4.Extending the term of the program: When HARP was introduced in 2009, the loans it backed were supposed to be a temporary fix to the mortgage-bubble burst. Now, the program has been extended 18 months so that borrowers can apply for loans through the end of 2013.
5.Inviting competition: Under the current model, the original lender of a HARP-backed loan holds all the power over its rates because the system is too complicated and risky to invite competition. Thats according to National Economic Council Director Gene Sperling, who calls the plan to waive certain representations and warranties for loan makers the most important of the proposals. Sperling expects the move will make it more appealing for other lenders to jump into the market and challenge the current holders.
#4 sounds like the same as ‘rat’s answer to unemployment-—extending UI to 99 weeks.
#5. “...the system is too complicated “—of course, more gubmint intervention will fix that.
Trying to drum up some votes for his re-election.
not to worry, the newest series of derivative swaps will more than cover [launder] the trillions that my grandkids will owe on my 200 yr old farmhouse...