Call (727) 784-5555
Blog Layout
President Obama's Mortgage Refinance Plan
DDA Mortgage • Nov 02, 2011
Mortgage refi plan targets hard-hit borrowers
By Steve Goldstein, MarketWatch
WASHINGTON (MarketWatch) — President Barack Obama on Monday unveiled a changed mortgage refinance plan that would allow homeowners who have suffered steep price declines on their properties to get cheaper loans.
The Home Affordable Refinance Program, the only program specifically designed for owners whose mortgages are worth more than the value of their homes, is being changed so that more Fannie Mae- or Freddie Mac-guaranteed mortgages could be refinanced. Use external link to see if Fannie Mae has guaranteed your mortgage. Use external link to see if Freddie Mac has guaranteed your mortgage.
With house prices nationally roughly a third below their peak, there are millions of borrowers who will potentially be eligible to refinance into mortgages near record lows — the 30-year carried an interest rate of 4.11% last week — rather than the mere 894,000 borrowers who have used the program so far.
“These are important steps that will help more homeowners refinance at lower rates, save consumers money and help get folks spending again,” Obama is due to tell an audience in Las Vegas, the city with the highest foreclosure rate in the country. Nevada is the only state which cumulatively is underwater on mortgages.
The new plan does have its limitations: it will require homeowners to be current on their payments and it’s only for loans sold to Fannie or Freddie by May 31, 2009. And of course, not all loans are backed by the housing giants, though state attorneys-general are separately negotiating a settlement with the nation’s top lenders that may include an element of mortgage modification.
“Given the magnitude of the housing bubble, and the huge inventory of unsold homes in places like Nevada, it will take time to solve these challenges,” Obama admitted, according to prepared remarks.
ECONOMY AND POLITICS | Economy and Politics page
The Federal Housing Finance Agency, the regulator for Fannie Mae and Freddie Mac, estimates that refinancing could double under the program. Even so, the program would go only a small way in addressing the roughly 11 million homeowners who are underwater.
To spark interest in HARP, the program will lower fees, eliminate the current 125% loan-to-value ceiling, waive lender warranties and eliminate the need for property appraisals.
White House officials say the refinancing could save owners about $2,500 each year.
Gene Sperling, the director of the National Economic Council, said the key element of the plan is the removal of reps and warranties. “Removing reps and warranties has the potential to unleash competition for housing refinance,” Sperling told reporters on a call.
The industry embraced the initiative.
“Lenders are particularly gratified that the refinements will provide relief from some representations and warranties that lenders face when originating new loans,” said David Stevens, president and chief executive of the Mortgage Bankers Association. “These changes alone should encourage lenders to more actively participate in HARP.”
He cautioned that “it will take a bit of additional time” even after FHFA guidelines are introduced in November to implement them.
Politically, the plan is the start of a once-a-week effort to show the Obama administration can get things done even when legislative efforts are blocked in Congress, according to the New York Times.
For the economy as a whole, the program is seen having only a limited impact.
Yelena Shulyatyeva, an economist at BNP Paribas, calculates that the program could leave to savings on the order of $2.75 billion — or 0.02% of annual disposable income.
“While the households that benefit will see an increase in disposable income of as much as 5% as a result of lower mortgage payments, in the aggregate, the direct impact is not material from a macroeconomic point of view,” she said in a note to clients.
“This would hold even if the program is more successful than the FHFA anticipates. Nevertheless, indirect benefits of the plan include further lowering delinquency rates and alleviating bank losses to a modest degree.”
Check out our other helpful videos to learn more about credit and residential mortgages.
U.S. home prices continued to climb in March as a persistent shortage of homes for sale helped to buoy the housing market, according to the Intercontinental Exchange (ICE) Home Price Index. And while prospective homebuyers cope with the challenges of rising housing unaffordability, existing homeowners are reaping the benefits of historically strong price gains. Nationwide equity on mortgaged homes soared to a record $16.9 trillion in the first quarter of 2024, with $11 trillion available for leverage while maintaining a 20% equity cushion — also an all-time high. The ICE index showed that home prices increased by a seasonally adjusted 0.42% month over month in March, marking the third consecutive month of above-average price gains, although this was a slight pullback from February’s 0.58% increase. On an annual basis, home price growth eased slightly in March to 5.6%, below the upwardly revised gain of 6% in February. “The recent trend of rising interest rates has dampened homebuyer demand and allowed the inventory of homes for sale to improve,” Andy Walden, ICE’s vice president of enterprise research strategy, said in a statement.  “We’re still very much in a hole from an inventory perspective, but that deficit has fallen from 50% a year ago to 38% in March. Today, with 3.3 months of supply, inventory is still historically low and indicative of a seller’s market. This is helping to keep home price growth resilient even though
There are two main types of FHA 203(k) loans: Standard 203(k) Loan: This is for more extensive renovations and repairs, including structural changes and repairs that exceed $35,000. The loan amount is based on the projected value of the property after the renovations. Limited 203(k) Loan: This is for less extensive renovations and repairs, typically costing less than $35,000. It's often used for cosmetic improvements, such as updating kitchens or bathrooms. Some key points about FHA 203(k) loans: They require a down payment of at least 3.5%. The property being renovated must be a primary residence. Borrowers must work with an FHA-approved 203(k) consultant. There are specific eligibility requirements and guidelines for the types of renovations and repairs that can be financed. Overall, FHA 203(k) loans can be a helpful option for buyers and homeowners looking to finance home improvements, but it's essential to understand the requirements and limitations of the program before applying. Tune in and learn https://www.ddamortgage.com/blog Didier Malagies nmls#212566 DDA Mortgage nmls#324329
One program that is available for first-time home buyers is where you can put 1% down and the lender will give you the other 2% towards a down payment. A total of a 3% down on your home. If you bought a 300,000 home you would put 3,000 down and if you got the seller to pay 3% of closing costs, you just bought a home for $3,000. What would it cost to move into another rental? First, Last, and deposit? Now for the next program. depending on where you live, you could get up to $5,250 for a down payment or closing costs. That is huge and with the seller paying closing costs, Now you can see how the opportunities of getting into a home No liens, second mortgages, or anything. This is a great opportunity not to have to do down payment assistance with a second lien against your home with certain restrictions there are no restrictions with the 1% down or up to $5,250 towards down payment or closing costs Please let me know how I can help you tune in and learn at https://www.ddamortgage.com/blog Didier Malagies nmls#212566 DDA Mortgage nmls#324329
