About Government Refinance and Home Purchase Programs

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.

In conjunction with the Obama administration announcing intentions to revamp and revitalize some of the government-backed refinance programs that are now in place, several US senators recently sent a letter to regulators urging improvements as well. We get this from a recent HousingWire report:

A group of 13 senators sent a letter to regulators Tuesday, pressing for a plan to boost mortgage refinancing for more homeowners as soon as possible. Such a plan is being widely-discussed admittedly, and now the lawmakers are ready to see some action.

“Time is of the essence and we urge you to act quickly and aggressively to ensure that responsible homeowners receive the full benefit of these lower rates,” the senators said in the letter to Treasury Secretary Timothy Geithner, Department of Housing and Urban Development Secretary Shaun Donovan, Federal Housing Finance Agency Acting Director Edward DeMarco, and National Economic Council Director Gene Sperling.

While a letter from senators might be more show than substance, it does help show there is wide support for upgrades and changes to the HARP programs and other government-backed refinance programs. With any luck regulators will announce the changes and upgrades soon. As soon as changes are announced we will report on them here.

In the meantime, contact us in the sidebar to learn more about the government back refinance programs that are already available while rates are still hovering near all time lows.

A few weeks ago President Obama hinted at a new mortgage refinancing plan his administration was cooking up. Most speculations since then have been that the new plan would be an expansion of the Home Affordable Refinance Program (HARP) to make it available to even more borrowers than the current version of the program. Treasury Secretary Tim Geithner recently said more that would indicate a new plan will be announced soon. We get these quotes from a recent Wall Street Journal blog post:

“My sense is, based on what I’ve seen…it’s going to be meaningful enough to make a difference,” Mr. Geithner said at a Senate Banking Committee hearing…

“They are looking at a range of things and you’ll see more details in a couple of weeks,” Mr. Geithner said.

Stay tuned. It sounds like the changes will be announced in the next few weeks.

In the meantime, rates continue to test new lows this month. Contact us in the sidebar to learn more about the refinance programs that could help you.

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.

The Fed announced a new plan today that will likely compress mortgage interest rates even further. Here is an excerpt from a HousingWire piece on the subject:

The committee also said “to help support conditions in mortgage markets” it will reinvest principal payments from agency debt into agency mortgage-backed securities.

That’s a departure from the Federal Reserve’s previous practice of reinvesting those proceeds into Treasuries and appears to be an effort to lower mortgage rates.

The purchase program, to be completed by the end of June, will involve longer-term Treasury securities with remaining maturities of six years to 30 years, and will be financed through the sale of shorter-term Treasuries with maturities of three years or less.

“This program should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative,” the FOMC said in a statement following its two-day meeting.

Contact us in the sidebar to learn about which programs could help your family.

More than a week after President Obama announced in a speech before congress that he wanted to make it easier for American home owners to take advantage of the record low interest rates we are seeing on mortgages now there have yet to be any concrete policy changes. Rumors are that the changes will be to the Home Affordable Refinance Program (HARP) with the goal of making it easier for many more home owners to qualify for that program. We’ll keep you post on news as it breaks.

In the meantime, contact us in the sidebar to learn more about the government-backed refinance programs you might already qualify for.

As expected, part of President Obama’s recently revealed jobs plan was a plan to make it easier for more Americans to refinance their mortgages to the historically low interest rates we have been seeing in the last month or so. The president outlined his plan last night and it looks like main idea is to make it easier to qualify for the already existing Home Affordable Refinance Program (HARP). Here are some quotes from a Reuters article on the topic:

President Barack Obama said on Thursday he is seeking to broaden U.S. homeowners’ access to mortgage refinancing in a plan to help the ailing housing market and put money back in the pockets of borrowers needing help locking into record low rates.

“We’re going to work with Federal housing agencies to help more people refinance their mortgages at interest rates that are now near 4 percent,” …

The White House officials said the U.S. Treasury was having talks with both Fannie Mae and Freddie Mac and their regulator — the Federal Housing Finance Agency — on ways to broaden refinancings. The aim is to is to “remove the barriers that exist in the current refinancing program.” …

The refinancing initiative under consideration by the Obama administration would need final approval from the acting head of the Federal Housing Finance Agency, Edward DeMarco. Those close to DeMarco say he is acting as an independent regulator with the goal of conserving the assets at Fannie and Freddie, a position he has staunchly defended before lawmakers since the two firms were taken over by the government three years ago.

The encouraging news is that the Obama Administration does not appear to need the approval of the Republican-led congress to make access to the HARP program easier. Rather the administration mostly needs to persuade the independent head of the FHFA Edward Demarco that their plan is sound.

We’ll keep you posted on the progress of this new initiative. In the meantime, contact us in the sidebar to see which government-backed refinance programs you already qualify for.

As investors all over the world become increasingly nervous about world economic conditions more and more are buying up US treasury bonds as a safe haven for their money. That in turn is reducing the yield on US treasury bonds which in turn has continued to compress mortgage interest rates. The end result is that rates on government-backed mortgages are at astonishingly low rates this month.

Contact us in the sidebar to learn more details on the programs and rates connected with government-backed refinances. Dips in interest rates this steep normally don’t hold for long.

There has been a lot of speculation that President Obama will include a new mortgage assistance program as part of his speech this evening. We get this from a recent MarketWatch article:

President Barack Obama may suggest changes to a struggling housing refinance program to try to double the participation in the program and help kick start the economy in his speech before Congress on Thursday night, regulatory analysts said. …

The Federal House Finance Agency, which regulates Fannie and Freddie, may be considering a number of approaches to expand the participation of both lenders and so-called “underwater” borrowers of Fannie and Freddie-backed mortgages who owe more than their homes are worth. However, regulatory observes insist that all these approaches increase costs to taxpayers and damages mortgage investor confidence.

Of course whatever he pitches probably won’t make it past congress so on the ground level it likely won’t make much immediate impact. But it will be interesting to see what the plans are anyway.

This afternoon the Fed made the unusual pledge to keep its lending rates at record lows for a full two years more. This action was undoubtedly spurred by the recently faltering US economy. The Fed seems to want to bring some confidence and stability back into the market.

Early results were encouraging. Not only was there a rally in the stock market, mortgage interest rates dipped pretty substantially mid-day. If you have considered lowering your interest rate now is the time to get a quote on one of the government-backed mortgages programs. Contact us in the sidebar for guidance on getting an estimate.

Over the weekend S&P lowered the credit rating of the United States from AAA to AA+. As a result stocks have taken a beating over the last few days. Yet despite this announcement from S&P, mortgage interest rates on government-backed mortgages have dipped even further this week. Part of the reason for that is that mortgage interest rates usually follow the yield on the 10 year treasury note and the yields on those T-notes has continued to drop.

While decreasing values on Wall Street is not a good thing, it has not been a bad thing for mortgage interest rates for now. Contact us in the sidebar this week to learn which government-backed refinance programs could help your family while rates remain near 50-year lows.

VA Loans are mortgages that are available to the families of US military veterans. For folks who are eligible, VA loans have some terrific benefits. Here are some of the positives of refinancing into VA loans:

– You can get up to 100% of the current value of your home. This is true even when the the refinance is rolling in a first and second mortgage (unlike HARP and FHA loans)
– There is no monthly mortgage insurance fee associated with VA loans (unlike FHA loans)
– Rates on VA loans tend to be quite low
– Overall lender fees on VA loans tend to be lower than other loans

Having said that, there is an upfront funding fee associated with VA loans. For that reason refinancing into a VA loan is not always the best option even for borrowers with VA eligibility. Still in some cases refinancing into a VA loan is an excellent solution.

Contact us in the sidebar to learn more about refinancing into a VA loan as well as the other government-backed loan programs that are available.