About Government Refinance and Home Purchase Programs

The version of the Home Affordable Refinance Program directed toward second mortgages is to be implemented at the start of 2011. We get this from a recent HousingWire report on the subject:

Fannie Mae, which administers the Home Affordable Modification Program for the Treasury Department, released guidance for servicers participating in the Second Lien Modification Program (2MP).

Fannie requires servicers to implement 2MP by Jan. 1, 2011. Fannie released the guidance Tuesday in a letter to servicers. All Fannie servicers are required to join the program, and the top-four banks have committed, too.

Under 2MP, only second liens originated on or before Jan. 1, 2009 will be eligible for a modification if its corresponding first lien has been modified under the HAMP. Through August, more than 468,000 distressed loans have been given a permanent modification.

The second lien can be either current or delinquent, but it must hold an unpaid principal balance of more than $5,000.

…

The modification of the second lien will not become effective until the first-lien is modified through HAMP and the borrower has made all required 2MP trial period payments.

Servicers participating in the program must offer a 2MP trial period within 120 calendar days after receiving the first and second-lien matching information from LPS.

After dipping to astonishing lows over the summer mortgage interest rates have begun inching up again in the last couple of weeks. Is it all uphill from here for interest rates? Well considering that rates have been at all time lows the most likely answer is yes.

The good news is that interest rates on government-backed mortgages are still very near the all time lows that were reached this summer. So if you have been considering refinancing or even if you just would like to get an estimate on a refinance or information on any other government-backed mortgage program contact us in the sidebar right away before rates head back up.

While interest rates on 30-year mortgages have basically leveled out or have inched upward in recent weeks, rates on 15-year mortgages have been inching down to new historic lows. For borrowers who can afford the marginally higher payments, 15-year mortgages can be a very effective way to dramatically reduce the total money paid in interest over the life of the loan. Contact us in the sidebar today to learn more about the benefits and payments associated with a 15-year mortgage.

Here is an excerpt from a recent Reuters article on the subject:

U.S. 30-year mortgage rates rose for a second straight week while those on 15-year mortgages dropped to a record low, according to a survey released on Thursday by Freddie Mac, the second-largest U.S. mortgage finance company. …

Interest rates on U.S. 30-year fixed-rate mortgages, the most widely used loan, averaged 4.37 percent for the week ended Sept. 16, up from the previous week’s 4.35 percent and down from its year-ago level of 5.04 percent, according to the survey.

Freddie Mac (FMCC.OB) started the 30-year fixed-rate mortgage survey in 1971.

Meanwhile, 15-year fixed-rate mortgages averaged 3.82 percent, down from 3.83 percent last week, the lowest since Freddie Mac began surveying this loan type in 1991.

“Interest rates on 30-year fixed mortgages have remained below 5 percent for the last 19 weeks giving people ample opportunity to refinance their existing mortgage debt,” Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement.

The weeks long downward trend in mortgage interest rates seems to have halted for now. Latest numbers have mortgage interest rates higher this week than last week. Rates on government-backed and conventional mortgages are still at record lows but won’t remain that low forever. If you have considered looking into refinancing to a lower rate contact us now in the sidebar before rates head back up again.

The new FHA short refi program is set to begin on Tuesday September 7. See technical details on the program here and an editorial about the difficulties the program may face here.

Also here are some excerpt from a recent WSJ article on the pending program:

Officials say between 500,000 and 1.5 million so-called underwater loans could be modified through the program, the first initiative to target homeowners who are current on their mortgage payments but are at risk of default because they have no equity in their homes. Some experts are warning, however, that the same knots that tied up prior initiatives could do so again.

Under the new “short refinance” program, banks and other creditors that write down mortgages to less than the value of the property can essentially hand off the reduced loan to the government. The process involves refinancing borrowers into loans backed by the Federal Housing Administration.

Fill in the form on the right to have one of our counselors answer more questions about available programs.