About Government Refinance and Home Purchase Programs

After hitting shocking lows over the Fall of 2010 interest rates on government-backed loans have been slowly inching higher since then. Nevertheless rates on 30 year fixed loans are still currently in 4’s on average, in the high 3’s in some cases for 15 year mortgages, and even lower on some 5 year and 7 year ARMs. So if you have a mortgage with a rate in the 5’s or higher and plan to own your home for five of more years now is the time to look into locking in a lower interest rate. It is no secret that the rates are being artificially compressed by the Fed right now but sooner or later rates will go back up to more normal levels and the chance to lock in rates not seen in 50 years will pass for good.

December tends to be a really good month to get the ball rolling on a refinance because borrowers tend to procrastinate getting started due to the holidays. That leaves extra time for authorized lenders to help people who don’t procrastinate. So if you have a fixed interest rate at 5% or higher or an ARM that you would like to fix in, contact us in the sidebar right away to see about taking advantage of the government-backed mortgage refinance programs.

Below is an interesting interview from the folks at Yahoo Finance with Senator Ted Kaufman. Kaufman chaired a recent panel looking at the effectiveness so far of the Home Affordable Modification Program and has come to the conclusion that the program has generally been a failure. That is largely because the program started with a goal of modifying 3-4 million mortgages in order to avoid foreclosures but is on pace to actually modify 800 thousand or fewer.

Of course for those 800 thousand homeowners the program has not been a failure but the overall numbers are much lower than hoped for. The good news for those of you who are interested in a loan modification is that The Treasury is still hoping to work toward that 3-4 million goal. So if you are interested in a modification or a government-backed refinance contact us in the sidebar and we will give you some guidance on the best programs for your family.

Here are some excerpts from the write up associated with the interview:

The Congressional Oversight Panel has declared President Obama’s Home Affordable Modification Program (HAMP) a failure, laying much of the blame at the feet of the Treasury Department.

“Treasury was in a very tough situation but the result is a lot less mortgage modifications than we hoped for,” says Sen. Ted Kaufman (D-Del.), the panel’s chairman. “It’s a failure in regard to fact we originally hoped to save 3 to 4 million American families from foreclosure and are now on target to do 700,000-800,000.”

The holidays and government-backed mortgage lending have a rocky relationship. The problem is that even when authorized lenders are at full strength, completing a refinance normally takes about three weeks. But the holidays always cause additional delays. First there are all those actual holidays that reduce the number of business days in November and December. Add to that the extra time processors and underwriters normally take off and you are often looking at weeks added to the process of completing a mortgage transaction. For those reasons, if you were considering looking into refinancing your mortgage at the start of 2011 it would probably be wise to start your investigations now.

Further, some banks are holding off on foreclosures until January. When banks get back to foreclosing on homes at the start of 2011 that could further depress housing values throughout the country. That in turn could reduce the amount of equity you have in your home. In cases where the equity is tight already waiting too long could cause troubles.

So if you have been thinking about refinancing while rates are still near historic lows we recommend you get a jump on the post-holiday crowd and contact us in the sidebar right away. Our counselors can help you figure out which programs are available for your situation. Getting the ball rolling now could save you time and headaches in January.