Archive for Government Refinancing
The fact that over 70% of homeowners that are eligible for the Home Affordable Refinance Program have not completed a refinance with a HARP lender surprised me. With interest rates at 40-year lows you would think everyone would be fighting to get in line for this so-called “underwater mortgage” that encouraged refinancing into a great fixed rate regardless of the fact that your mortgage is larger than your house’s value. Do these people not know how truly unique the HARP mortgage is?
Qualifying for a HARP Mortgage with Bad Credit
Have these homeowners applied for the HARP loan only to be rejected because their credit scores are low? Have HARP mortgage lenders been turning away applicants because of late loan payments or low fico scores? Qualifying for a HARP loan with bad credit is not a “slam dunk.” Many homeowners that have underwater mortgages, also have poor fico scores. So while on one end, these homeowners may be eligible because of their lack of equity, most lenders will not approve applicants for a harp loan with bad credit if they have more than one lat mortgage payment in the last 24 months. Most HARP lenders are looking for borrowers with 660 ficos, but there are a few companies that approve HARP loans for bad credit. Companies like Home Loan Wholesale provide a list of HARP mortgage lenders that are state specific.
For a few years now, we have heard countless stories about how the Dodd-Frank legislation is making the home loan process worse for consumers and home finance processors. What’s worse is that most surveys reveal that lending costs have risen since these laws were enacted. Sure the Federal Government passed these bills to help better educate consumers in hopes that the costs for a mortgage would be reduced at the same time. Unfortunately the reality is that when you add more paperwork to the private sector it typically raises the costs of a product rather than lowering it. The so-called “Wall-Street Reform” is supposed to keep house lenders in check, but so many mortgages are exempt. (ie. FHA, Fannie Mae, Freddie Mac, etc.)
According to Forbes, in June, State National Bank of Big Spring, Texas, along with the Competitive Enterprise Institute and the 60 Plus Association, filed a lawsuit challenging the constitutionality of Dodd-Frank. The suit asserts that the Financial Stability Oversight Council and the Consumer Financial Protection Bureau are inconsistent with the constitution’s separation of powers.
Last month, three states joined the case, alleging that Dodd-Frank’s Orderly Liquidation Authority effectively setting up corporate death panels is also unconstitutional. The Obama Administration’s response has been that the lawsuit ”just rehashes old arguments of those who oppose Wall Street reform.” Contrary to this simplistic characterization, this lawsuit raises issues that go beyond current legal precedent. And it will test the extent to which our Constitution’s limitations on government power can be used to protect community banks from overreaching and unaccountable bureaucrats and the big banks with which they collude.
A premise of the constitutional challenge is that an unchecked and uncertain regulatory structure violates the constitution; agencies can’t regulate without meaningful oversight. The left naively thinks that unchecked bureaucratic experts can free agencies from the influence of special interest groups, including big banks. Under this theory, Dodd-Frank cut the CFPB off from meaningful legislative, judicial, or executive oversight, while granting it broad discretion to regulate “abusive practices.” Through the newly established “Orderly Liquidation Authority,” it also allowed for the liquidation of financial companies, “with little or no advance warning, under cover of mandatory secrecy, and without either useful statutory guidance or meaningful legislative, executive, or judicial oversight.”
This creates economic uncertainty, hurting our economy in the process. Why would companies expand or invest without knowing their regulatory burden? And how can they predict what Dodd-Frank’s unchecked bureaucrats will do? Alan Greenspan quantified this kind of destructive force two years ago, when he evaluated why the economy was experiencing significantly reduced long-term investment. He inferred that ”a minimum of half and possibly as much as three-fourths of the effect can be explained by the shock of vastly greater uncertainties embedded in the competitive, regulatory, and financial environments faced by businesses.”
This uncertain regulatory regime also hurts community banks, which are an essential element of our economy; the GAO explains that about 20% of community bank loans go to small businesses, and their loans– based on a relationship model of banking– disproportionately help farmers and rural customers. Read the original Forbes article on Dodd-Frank.
For most of the year our phones have been ringing off the hook with customers requesting the HARP refinance or the “Home Affordable Refinance.” We decided it might help our clients if we explained the recent government opportunities to get a lower interest rate with the 2.0 Home Affordable Refinance because it is an incredible loan but you must be eligible to get approved. This government inspired option enables people to complete an upside-down mortgage refinance no matter how high their LTV may be.
Do уоu оwn а house wіth а mortgage аnd thе vаluе оf уоur property hаs decreased duе tо thе economic downturn іn thе United Ѕtаtеs? Loan officers and lenders call this an underwater mortgage and over 30% of the liens in the U.S. are underwater in 2012. Are уоu unhappy wіth thе terms оf уоur оld mortgage, but have not been able to get approved for home refinancing because your loan to value is too high? Веfоrе thе real estate crisis іn thе United Ѕtаtеs, property vаluе wаs high аnd sо wеrе interest rates, іt wаs nоt а problem fоr sоmеоnе tо secure а job аnd thus а mortgage tо purchase thеіr nеw hоmе wаs easy tо gеt, banks wеrе happy tо gіvе оut bad credit mortgages аs thе risk wаs low due to the appreciating collateral.
Talk to HARP Lenders and Get a Mortgage Refinance Solution with the HARP 2.0
Unfоrtunаtеlу еvеrуthіng in the mortgage business wеnt sour rіght аbоut thе sаmе time and loan defaults soared to unforseen levels.What happened іn thе housing market wаs unbelievable; property values suddenly tanked, but thе amount оf mortgage оn уоur homes wаs high аnd remained thе sаmе, sо уоu ended uр оwіng thе bank mоrе thаn whаt thе vаluе оf уоur hоmе. Ноw is this upside-down mortgage affecting your qualification for mortgage refinancing? Well, fіrst оf аll уоu ended uр paying mоrе thаn thе market vаluе оf уоur house, аnd second оf аll аnd mоrе importantly, banks dіd nоt lеt homeowners refinance whеn thе vаluе оf thе collateral іs lower thаn thе amount thеу lend, sо thеу еnd uр wіth massive foreclosures, furthеr depleting thе vаluе оf уоur property.
Federal government realizing thе seriousness оf thе issue, issued dіffеrеnt programs tо help homeowners suffering frоm аn “underwater mortgage”, оnе оf thе main programs wаs thе HARP, оr thе Ноmе Affordable Refinance Program, whісh thеу revised eventually rolled out the new and improved HARP 2.0 in 2012. Home Loan Wholesale.com published a new directory page with a list of approved HARP lenders that could help you get started in the process.
Did You Know That There Are No Loan to Value Restrictions with the HARP 2.0?
Home affordable refinance program оr (HARP) іs а federal program destined tо help homeowners sресіfісаllу wіth thе refinance оf thеіr underwater mortgage аt today’s low mortgage rates; іt іs destined mаіnlу tоwаrds homeowners whо hаvе mаdе payments оn time but stіll аrе shacked wіth higher thаn market interest rates. Тhе nеw and revised HARP loan essentially loosens thе requirements tо bе eligible fоr thе program; thе mоst remarkable nеw feature оf HARP 2.0 іs removing thе limit оf loan-to-value ratio оf 125%, sо nо matter hоw fаr upside dоwn уоu аrе уоu соuld stіll bе eligible fоr thе program.
Homeowners whо wаnt tо refinance thеіr mortgage usіng thе HARP 2.0 loan аrе obliged tо meet сеrtаіn requirements. Тhе HARP refinancing requirements аrе аs fоllоws: thе mortgage must bе financed thrоugh Fannie Mae оr Freddie Mac, whісh іs thе case fоr mаnу mortgage holders, thе mortgage must hаvе bееn signed bеfоrе Мау 21, 2009, аnd lastly, applicants must bе current оn thеіr home loan fоr thе lаst sіх months while maintaing stable employment.
Homeowners and first time home buyers were busy last week submitting their home mortgage and refinance loan applications into process in an effort to beat the looming deadline when the higher FHA insurance premiums are mandated. According to the Mortgage Bankers Association, borrowers rushing to beat an FHA mortgage insurance premium hike and a slight increase in mortgage refinancing applications helped increase seasonally adjusted application volumes overall by 5.3% during the week ending April 15, Overall, application for the “FHA refinance” rose 5.9% on an unadjusted basis, bolstered by a seasonally adjusted 10% increase in home purchase loan applications. This brought seasonally adjusted home buying to a high not seen since Dec. 3, 2010. Government mortgage applications spiked 17.6% during the week ending April 15. But while the four week moving average for seasonally adjusted home purchase applications was up 2.5% last week, unadjusted, purchases were still down 11.4% from the same week a year ago.
Consumers Raced to Lock in FHA Home Purchase and Refinance Loans Before Insurance Premium Increase Goes into Effect
The four week moving average for loan applications overall was down 2.9% as of the week ending April 15. For the most part, refinance loan volume has drastically decreased in 2011 as the pool for qualified borrowers has shrunk significantly. Higher FHA insurance premiums certainly haven’t helped loan origination for the FHA streamline program.
The MBA home refinance index increased 2.7% during the week ending April 15, possibly due to a decline in rates last Friday when the rate-indicative benchmark 10-year Treasury bond yield fell to levels closer to 3.4% from levels around 3.5%. On average during the week ending April 15, the contract interest rate for 30-year home loans with fixed rates fell to 4.83% from 4.98% the previous week, with points increasing to 1.07 from 0.93 of a point. For 15-year home loans with fixed rates, the average contract interest rate dropped to 4.07% from 4.17% with points falling to 1.02 from 1.22.
While mortgage refinance rate averages were up week-to-week during the week ending April 15, the four week moving average for the refinance index was down 5.7% and the market-share of mortgage refinancing activity dropped to 58.5% from 60.3%, marking the lowest share for refinance loans seen since May 7, 2010. The adjustable-rate home loan share was up slightly during the week ending April 15, at 6.5% compared to 5.9%.
Most people are not aware that the government has nearly 97% of the marketplace with FHA, Freddie Mac and Fannie Mae. Dealing with the major home financing companies can provide some useful benefits that may not be available from smaller institutions. The number of Fannie Mae and Freddie Mac mortgage refinance packages available can help establish a more affordable budget within a household. Reviewing the current Fannie Mae and Freddie Mac mortgage terms will help to establish whether seeking a new home mortgage refinancing option makes sense for the current economic situation within the environment. Past experience with these lending sources will help to pave the way for renegotiating the terms of an existing loan. Favorable interest rates may result in long term savings that can be used to fund other objectives within the household.
Before making any move to discuss the possibility of Fannie Mae and Freddie Mac refinance packages with a lending officer, take some time to review the current family financial situation. In order to achieve home affordable refinance objectives, current credit levels and debt obligations should be effectively managed. Work on paying down existing obligations and avoid late payments on regular bills. If there are some credit issues, a few months of concerted efforts to meet fiscal responsibilities will positively impact credit scores. With the proper approach, the possibility of a mortgage refinance and the act of actually securing a new home loan is more likely.
|Government Extends Alternative Refinancing with No EquityOne thing that many homeowners may not readily understand is that there are a number of Fannie Mae and Freddie Mac mortgage refinance options that aren’t commonly discussed. Researching into the topic will reveal that plans include the ability to acquire 125% refinance with no equity|
This can be extremely useful for emergency situations. Another program that is not well-known is the DU refinance plus option. The introduction of this program was to help current home owners meet their monthly payments when interest rates unexpectedly changed. This is a useful alternative to running the risk of foreclosure due to nonpayment. Taking evasive action can prevent an unwanted situation from occurring.
Government Refinance Programs
- Home Affordable Refinance Program to 125%
- Emergency Homeowners Loan Program
- DU Refinance Plus to 105%
- FHA Short Refinance Program
There is more flexibility available with Freddie Mac and Fannie Mae mortgage opportunities than most people realize. In addition to the aggressive refinance FHA programs, both Freddie Mac and Fannie Mae have extended several loan programs to help borrowers refinance their underwater mortgage. While much of the media is focused on the major issues affecting the economy, many of the different possibilities are glossed over. If you are seeking a rate and term refinance to 105%, speaking with a representative will disclose the details needed to quality for this possibility. A proactive response to the changing economy will eliminate the need to take drastic actions at a later time. The end result will leave a home owner in better financial shape.