About Government Refinance and Home Purchase Programs

The new FHA streamline program that was recently announced is set to go live in just over a month. Homeowners who got their current FHA loan prior to May of 2009 are eligible. The new program allows borrowers to replace their existing FHA loan with a new FHA loan at the current low interest rates without increasing monthly PMI, without adding any money to the loan balance, and without any closing costs. The FHA will start accepting these new streamline loans after June 11, 2012 but borrowers can begin the application process now in anticipation of the new program. If you have an FHA loan that is three years old or older contact us in the sidebar to learn more about this excellent new program.

After sinking to all time lows in February of this year mortgage interest rates slowly moved higher throughout the month of March. But a recent batch of bad economic news sent the stock market tumbling has helped mortgage interest rates to move lower again as well. As we have noted here in the past, mortgage interest rates tend to track the yields on the 10-year treasury note and when investors are fleeing stocks they often purchase more 10-yr T-Notes which in turn lowers the yield on those bonds. The current dip in mortgage interest rates is most likely associated with the less than stellar jobs report that came out last week as well as renewed debt crisis worries in Europe. Rates may not hit new record lows again but they are getting nearer to those record lows again this month.

Contact us in the sidebar right away to learn about the government-backed refinance programs that could help your family.

While most authorized lenders are still not fully participating in the HARP 2.0 program, a small but growing number of them on our list are. The early returns indicate that it remains easier to get a HARP 2.0 loan for Fannie Mae loans than for Freddie Mac loans. The same holds true for appraisals — the Fannie underwriting software is more likely to allow an appraisal waiver than the Freddie underwriting software. Nevertheless the program is fully operational now for both Fannie and Freddie conventional mortgages. The HARP 2.0 program is allowing refinances for underwater home mortgages regardless of loan to value ratios and it is allowing mortgage insurance to transfer. Those two things were not allowed with HARP 1.0.

Contact us in the sidebar today if you have a conventional mortgage that was originated prior to May of 2009. Odds are pretty good that your mortgage will be invested in behind the scenes by either Fannie or Freddie and if it is you could be a good candidate to significantly reduce your interest rate and monthly payments through the new HARP 2.0 program.

In early April of 2012 the FHA will be dramatically increasing their upfront and monthly mortgage insurance premiums. These increases will affect all new FHA purchase loans, conventional-to-FHA refinances, and refinances from one FHA loan to another FHA loan (called FHA streamlines) when the current FHA loan is less than three years old. If you have an FHA loan that you got after April of 2009 contact us right away in the sidebar to look into dramatically reducing your interest rate through the FHA streamline program before the new higher fees kick in. After April 9, 2012 it will be virtually impossible to streamline an FHA loans that is less than three years old.

For FHA loans that are more than three years old there is a new program that was just announced that is extremely beneficial. It allows FHA streamlines of those older FHA loans at virtually no costs and without increasing mortgage insurance fees. While the April 9 deadline on FHA streamlines does not apply to FHA loans that are from April of 2009 or older, contact us in the sidebar if you have one of these older FHA loans as well to learn more about that terrific new program that was just announced.

Fannie Mae and Freddie Mac officially began accepting HARP 2.0 loans this week. On the ground just a handful of authorized lenders have begun testing the waters with the new program. Some lenders are allowing refinances above the 125% loan to value. Other lenders are allowing mortgage insurance to transfer for the first time. But the reality is that the adoption of HARP 2.0 is tentative at best so far. The general trend early on is that borrowers with conventional loans backed backed by Fannie Mae will have more luck than borrower with conventional loans backed by Freddie Mac. The hope is that over time more and more lenders will more aggressively adopt the new program but only time will tell. Contact us in the sidebar to learn more about the HARP 2.0 program or the other government-backed refinance programs that are available.

President Obama had some terrific news this morning pertaining to Americans who currently have FHA loans. FHA loans that were originated prior to June of 2009 will now be allowed to streamline to a much lower interest rates WITHOUT adding a large upfront FHA mortgage insurance fee and without increasing the monthly mortgage insurance fee. This means that streamlining your FHA loan should be an absolute no-brainer if you are in that pre-June-09 category. Contact us in the sidebar now to learn more about this new FHA streamline program.

For FHA loans originated after May 2009 the options are more limited and the clock appears to be ticking. The FHA is planning on significantly increasing its mortgage insurance fees on all FHA loans originated after April 9, 2012. So if you have an FHA loan at a rate of 5% or higher that you got after May of 2009 contact us in the sidebar ASAP as well to see if you can streamline to a better rate before the pending FHA mip rate increase this April.

Note: If you don’t have an FHA loan there are programs available for borrowers with conventional loans or VA loans as well.

Despite some daily ups and downs, interest rates on most government backed mortgages remain at or near rates that have not been seen in the US in the last 50 years. Rates on FHA and VA loans have been slightly lower than the rates on conventional Fannie/Freddie loans but all are shockingly low as of late. If you have a 30-year fixed interest rate at 5% or higher or if you have an adjustable rate mortgage (ARM) contact us in the sidebar to learn more about the programs and rates that are available this week.

As has been predicted recently the FHA is poised to raise their upfront and monthly mortgage insurance fees once again starting on April 1, 2012. For FHA home purchases and for refinances from non-FHA loans into FHA loans the monthly mortgage insurance fee will go up by 10 bps (annualized) and the one-time up front mortgage insurance premium will jump from 1% of the loan amount to 1.75%.

The good news is that refinancing from one FHA loan to a better FHA loan through the FHA streamline program will reportedly not be subject to these new increased fees. That will be a major help to borrowers in FHA loans already.

If you have an FHA loan now at more than a 5% interest rate contact us in the sidebar to learn more about the FHA streamline program. With the streamline program borrowers can refinance to a much lower interest rate without having to pay the standard closing costs, get an appraisal, or even provide detailed income paperwork in most cases. The FHA’s logic is that if a borrower can avoid 30 day late payments and maintain a credit score of more than 640 at the higher interest rate, the borrower can do so even more easily at a lower interest rate. Contact us in the sidebar to learn more about this and the other available government-backed refinance programs.

In a speech given in Orlando today an official with the Federal Housing Administration indicated that the FHA is planning to increase its monthly mortgage insurance fees again. We get this from a recent HousingWire story on the topic:

The Federal Housing Administration will announce additional premium changes to its mortgage business and streamlined refinance programs in the coming days.

FHA Acting Commissioner Carol Galante said in a speech at the Mortgage Bankers Association servicing conference in Orlando, Fla., Wednesday that the changes are on their way.

As part of the payroll tax extension agreed to last fall, the FHA will raise premiums on its forward mortgages by 10 basis points and by 25 bps for jumbo loans.

If you have an FHA mortgage with an interest rate of 5% or higher contact us in the sidebar to learn more about the FHA streamline program. With rates on 30 year fixed loans sometimes as low as the high threes in recent weeks now is an excellent time to look into the FHA streamline program. The FHA streamline program lets responsible borrowers who have FHA loans now replace their current 30 year fixed FHA loan with a new 30 year fixed FHA loan at a much lower interest rate without requiring an appraisal or income verification. So with FHA streamlines it doesn’t matter how underwater the borrower is. But the monthly mortgage insurance premium already significantly increased for FHA loans last year and if it gets much higher it will be harder to streamline.

Contact us in the sidebar to learn more about this program and the other government-backed refinance programs available.

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.