125% Refi's Announced! Does the Government Finally Get it?

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) July 1, 2009 -- As I've been predicting for months, the FHFA just announced today that they will be allowing FNMA & FHLMC to refi underwater homeowners up to 125% of their property's value.

Previously the cap was at a joke amount of 105% LTV, resuting in President Obama's hyped Home Affordable & Stability Plan being way behind on the estimated number of homeowners it was meant to help.

It would ahve been better if they would've done away with the appraisal requirement on refinances all together, but this should help a decent amount of homeowners not eligible under the previous program

Now, keep in mind that this will take awhile to be implemented as a lot of software needs to be rewritten. Also, the when the government approved the 105% LTV, FNMA & FHLMC both added pricing hits, which offset some of the gains of lower rates. I would hope they don't do the same this time. Lastly, lets hope FNMA & FHLMC allow more lenders and brokers to do these loans. Right now, FHLMC forces homeowners to only go to their current lender. These lenders are prety backed up, some taking 60-90 days or more to close these loans.

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Drew Sygit writes and speaks about the mortgage & real estate industries. He holds mortgage industry designations CMPS, CMC, CRMS, CMLO, CALO, has an MBA and is an approved industry instructor. He’s presented, spoken and/or written for HUD, Financial Planning Association, Financial Planners Association of Michigan, Michigan Association of CPA’s, Institute of Continuing Legal Education, Oakland Real Estate Investors Association, North Oakland County Board of Realtors and numerous industry publications. He also publishes his own blog: http://drewsmortgagenews.blogspot.com. He can be reached at dsygit@TheLendingEdge.com.

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