About Government Refinance and Home Purchase Programs

For most of last couple of weeks interest rates on government-backed mortgages were testing all time lows. Then this week there was a slew of better than expected economic news: Unemployment dipped, the economy grew, job numbers increased, and congress agreed to extend the payroll tax. While it all sounds like good news, the reality is that good economic news normally results in interest rates increasing to some degree. We have already seen a small bump up in rates over the last couple of days. It remains to be seen if rates will rise further or if new lows will be tested in the weeks to come.

What we do know is that rates are still historically low right now so if you have considered looking into a refinance contact us in the sidebar right away to learn more about the government-backed refinance programs that are available.

There was big news today that the federal government reached a settlement with five of the biggest mortgage lending banks in the U.S. — Wells Fargo, Bank of America, Citi, Chase, and GMAC. While the news sounds big, for most Americans the settlement will have little impact. First, only borrowers who have loans serviced by one of those five banks will have the possibility of feeling an impact from this settlement. Among customers of those five banks here are the impacts that could be felt over the next few years:

Borrowers who have foreclosed in the last few years — Reports are that up to 750,000 people who lost their homes will receive $2000 as part of this deal.

People who are delinquent on their mortgages — Loan modification programs with these five banks will reportedly ramp up to some degree. There are rumors that in some cases these lenders will be willing to write down principal balances by up to $20,000 but details are sketchy on this.

Underwater borrowers who don’t have Fannie/Freddie or FHA loans now — There is hope that these five lenders will come up with refinance programs for the borrowers who can’t currently take advantage of the HARP program or FHA streamline program but no concrete plans have emerged yet.

While details are hazy reports are that the five lenders have three years to implement new programs as a result of this settlement so it could be some time before any changes in programs take full effect.

The good news is that most borrowers in the U.S. have loans that are currently backed by Fannie, Freddie, FHA, or the VA. For this majority of borrowers there are already solid government-backed refinance programs up and running. Contact us in the sidebar to learn more.

In an address in Fall Church, VA this morning President Obama fleshed out some of his new plan to help more Americans take advantage of the record low rates we are currently experiencing. The plan reportedly will lean heavily on the FHA and is designed to reduce barriers for folks who are not able to take advantage of the government-backed refinance programs already in place.

The major kink in the new plan is that the Republican controlled congress must approve it and the $5-10 billion price tag that comes along with it. Odds of that happening don’t seem high.

Even so, there are several very useful government-backed refinance programs that are already up and running well, including the FHA streamline program, the HARP program, and the VA IRRRL program. Contact us in the the sidebar to learn which programs might assist your family.

In his State of the Union address this evening President Obama announced plans for a new refinance program that is reportedly going to be targeted to borrowers who are having trouble taking advantage of the government-backed refinance programs already in place. We get the following from a WSJ article on the subject:

President Barack Obama called on Congress during Tuesday’s State of the Union address to approve new legislation that would give all homeowners who are current on their mortgages the opportunity to refinance at record low mortgage rates, officials said Tuesday.

Administration officials declined on Tuesday to outline the mechanics or costs of the program, and they said those details would be spelled out in the legislation in the coming days. “Responsible homeowners shouldn’t have to sit and wait for the housing market to hit bottom to get some relief,” Mr. Obama said. ” No more red tape. No more runaround from the banks.” …

Unlike the existing program, which was unveiled in 2009, the latest proposal wouldn’t limit such opportunities to borrowers whose loans are already backed by mortgage giants Fannie Mae and Freddie Mac, which guarantee about half of all outstanding loans.

While details on the new program are forthcoming, there are several very useful refinance programs already in place. Contact us in the sidebar to learn more about the available programs.

As we begin 2012 interest rates on mortgages are testing new lows. Borrowers with excellent credit and plenty of equity are seeing 30 year fixed rates below 4%. Rates are not quite that low in cases where credit is less than excellent or when there is little or no equity in the home but even in those cases the rates are astonishingly low right now.

Contact us in the sidebar to learn more about the government-backed refinance programs that are available and to get an estimate.

While interest rates on mortgages have been relatively low ever since the federal government began compressing rates in 2009, mortgage interest rates have been especially low since about August of 2011. The recent dip in rates was due to both global economic factors and actions from the Fed. As we enter 2012 mortgage interest rates remain near all time lows. When you combine the especially low rates with the government-backed refinance programs like the FHA and VA streamline programs and the new HARP 2.0 program that will become operational in the next few months, now is a terrific time to look into a government backed refinance.

Contact us in the sidebar to learn more about the government-backed refinance programs that might help your family as we launch into a new year.

With interest rates near record lows and new government-backed refinance programs being announced many Americans have considered looking in to a refinance. If you are among those people thinking about looking into a refinance, getting started in December has some practical advantages. The most important of these advantages is quite simple: shorter lines. Because of all the distractions from the holidays fewer refinances tend to be originated in December. The result is that the wait times for things like processing and underwriting tend to be much shorter. Starting the refinance process in December and closing the new loan in January is a great way to save time and get extra attention during your refinance process.

Contact us in the sidebar today to learn more about available programs, get an estimate, and possibly get the ball rolling for a January refinance.

The wave of bad economic news from Europe has served to help keep mortgage interest rates near record lows here in the US. As worldwide investors seek safe havens for their money the yield on the 10 year treasury note has remained low which in turn is keeping mortgage interest rates stunningly low by historic standards.

Contact us in the sidebar to see which government-backed refinance programs can best help your family.

In 2008 the loan limits on FHA mortgages were increased to allow more borrowers across the country qualify for FHA loans. On October 1st of this year those loan limit increases expired and reverted back to their original levels. After several weeks of debates in congress a bill reinstating those higher loan limits through the end of 2013 was passed and that bill was signed into law by President Obama on Friday. While this change will not affect a huge number of people, it will open up FHA loans to more Americans. To learn what the loan limits are in your county see this web site. (Note: it might take a few days for the new limits to be updated there.)

If you have an FHA loan now or would like to learn more about refinancing into an FHA loan contact us in the sidebar.

After hitting record lows at the end of September mortgage interest rates climbed slowly but steadily through most of the month of October. Rates increased in October in large part due to the news that Europe had worked out a temporary fix to their debt problems. But as October came to a close the European debt crisis hit a new snag which in turn led investors worldwide to purchase more US bonds which in turn is improving mortgage interest rates again. The excellent rates combined with the recently announced of an expansion of the Home Affordable Refinance Program (HARP) make now an excellent time to look into an government-back mortgage refinance. Contact us in the sidebar to learn more.

The Wall Street Journal reported earlier this week on a new plan to help more underwater homeowners refinance to lower interest rates despite owning more on their home than the current market value. We get this from the article:

The plan under consideration would make refinancing available to some borrowers whose houses are worth less than their loans, so long as they are current on mortgage payments, according to people familiar with the matter. Such borrowers typically aren’t able to refinance because they lack equity in their homes. The plan would apply only to mortgages owned by the banks. It isn’t clear how many of those borrowers would qualify for help. Around 20% of all U.S. mortgages are owned by U.S.-chartered commercial banks; the majority are held by investors in mortgage-backed securities.

The concept is still very short on details and seems to only apply to a fairly narrow range of people. But at least it is a sign that regulators a serious about opening new programs up for underwater borrowers who currently are not able to take advantage of the HARP program or FHA streamline program. We’ll keep you posted as more news on this subject comes out.

In the meantime contact us in the sidebar to see which programs you might already qualify for. While rates are up slightly from the lows reached near the end of September they are still hovering near all time lows.

Freddie Mac recently reported that mortgage interest rates last week were the lowest since they started tracking rates in the 1970’s. While rates raised a bit again this week there is speculation that the all time lows could be tested again in October in response to the Fed buying mortgage backed securities starting in October.

Contact us in the sidebar to learn more about the government-backed refinance programs that are available.