About Government Refinance and Home Purchase Programs

Prior to the recent state of the union address there was speculation that President Obama might bypass Congress and enact new mortgage relief guidelines through an executive order. The rumored changes, being tentatively called “HARP 3”, were reportedly going to open the benefits of the current HARP programs to borrowers who currently do not qualify for it. But in the speech President Obama gave he made it clear that, initially at least, he would wait to see if Congress could draft and pass legislation to accomplish that goal.

In the current gridlocked environment in Washington it seems unlikely that the House and Senate will be able to agree on any such legislation. It is unclear how long President Obama will wait on this legislation before taking matters into his own hands. Or it is possible that the Obama administration is just bluffing and has no intention of bypassing Congress with a HARP 3.0 program. Only time will tell. But for now we are in a wait and see period when it come to the potential HARP 3.0 program.

In the meantime, there are are several excellent government refinance programs already in full swing. Fill in the contact form on the right to get more info and an estimate.

We might be closer to “HARP 3.0” than expected. The Obama administration is reportedly considering issuing an executive order that would open the benefits of the HARP program to responsible borrowers who have conventional mortgages that are not currently backed by Fannie Mae or Freddie Mac. If this happens it would open the door for hundreds of thousands of homeowners to refinance to the historically low interest rates we are now seeing. Currently, borrowers who have less than 20% equity in their homes have great difficulty refinancing unless they have an FHA loan, Va loan, or a conventional loan backed by Fannie or Freddie. In cases where they still have some equity this currently undeserved group must add mortgage insurance to the loan and in cases where they have no equity they are out of luck entirely. So an executive order opening the benefits of the HARP program would be huge news.

Contact us in the sidebar to get the more information.

Good news for the stock market is bad news for mortgage interest rates. At least that has been the general rule over the last several weeks. As more investors move money into the surging stock market they are taking money out of bonds, and money leaving bonds tends to lead to higher mortgage interest rates. The trend in mortgage interest rates over the last 8 weeks has been upward, albeit slowly, as the DOW has surged to 5 year highs. But over the last few days the DOW has given back some of its gains and thus bonds and mortgage interest rates are slightly improving again in response.

If you have been considering taking advantage of the near-record-low mortgage interest rates we have been experiencing lately, or if you have considered taking advantage of the government-sponsored mortgage refinance programs that are now available, this is a good week to get started. With any luck the trend upward is over for a little while and mortgage rates will trend back down for the next several weeks. Contact us in the form on the right to learn more about available programs and to get an estimate.

While mortgage interest rates are not breaking new records this week they continue to stay down near record lows.

For FHA streamlines (FHA to FHA refinances) the interest rates have been in the mid to low threes in recent weeks. This can vary based on the age of the current FHA loan though. FHA loans that were started in the spring of 2009 or sooner have a special program that allow for lower costs. Consequently, lower interest rates are common with those loans because less lender credits are needed. For newer FHA loans (FHA loans started summer of ’09 or later) the streamline rates have been in the mid threes as well. In both cases it is common for borrowers’ break even on costs to be immediate so contact us in the sidebar today if you have an FHA loan.

On HARP loans, rates tend to be a bit higher. For significantly underwater homeowners with Fannie-Mae-backed conventional loans, most HARP refinances have been coming in between 3.875% and 4.25% in the last month or so. Part of the reason for this is that Fannie and Freddie recently raised their fees in order to remain solvent as companies. For borrowers with Fannie Mae loans who are not upside down on their first mortgage rates are better though. If you have a conventional loan see here to find out if Fannie or Freddie have backed your loan. If you do have a loan backed by Fannie or Freddie, contact us to get more info on the HARP program.

For folks with VA mortgages or with conventional loans that are not backed by Fannie Mae or Freddie Mac, rates are very low as well. VA rates tend to be very close to FHA rates and the VA-to-VA streamline program is even easier than the FHA streamline program. Rates on conventional loans where there is enough equity in the home tend to be better than HARP loan rates. Contact us in the form on the right to learn more about those programs as well.

As we discussed in our last post, the FHA is making some changes to its mortgage insurance guidelines to bolster its reserves. The details and dates of those changes are available in a new FHA mortgagee letter found here.

The first change is a small increase in the monthly mortgage insurance fees. That increase will take affect for any FHA case number that is requested on or after April 1, 2013. Any FHA application that is started prior to that date will be able to avoid that small fee increase. Further, people who have FHA loans that were started and endorsed by the FHA prior to May of 2009 will be exempt from the increase when they are streamlining to a new FHA loan.

The second change is for all FHA case numbers requested on or after June 3, 2013. After that date the monthly FHA mortgage insurance will last for the life of the loan in most cases. Currently the monthly FHA MIP can be dropped after 5 years if there is 22% equity in the home.

If you have an FHA loan (or know someone who does) contact us in the sidebar to get more info on an FHA streamline right away. While these changes won’t make FHA streamlines useless, it will be better for most borrowers to streamline before the new changes kick in.