Home Lending Revamp Planned

This is a certainty.

The Agencies used to have a Streamline Refinance program similar to FHA's, but once mass securitization of mortgages took over, the Streamline Refi program was killed off.

Here's some of the problems with it:

1) It's half assed. They should have gone "all in", returning to the original Streamlined Refinance program for any Agency loan, but the Administration chose not to.

2) Closed in July 2009 forward and your value's gone down? This program won't work. You'll have to pay PMI or principal down. Thanks for playing.

3) Closed prior to July 2009, but financed with a non FNMA owned loan? This program won't work. If you've got a Jumbo mortgage that isn't agency owned, thanks for playing.

4) Financed with "lender paid" PMI (PMI built into the rate). Your lender likely doesn't want to refinance out of these loans into anything other than a loan with PMI.  BofA refused to allow the refinancing their lender paid PMI loans for the longest time.

5) Lenders will have reduced Loan Level Price Adjustments (LLPA's) for these HARP v 2.0 loans. Today it's limited to 1.75% in fee add on. In this new program there have been whispers that it LLPA's would be eliminated.  If you don't fit within HARP v 2.0 but still have equity to refinance, your LLPA's can be as high as 4.0 points (Ex: investment condo over 75% LTV is 3.0 for investment, .75 for condo, .25 for FICO over 740)

Two steps forward, one step backwards. We're making progress - measured in baby steps - when a giant leap forward should be taken.

My .02c

Soylent Green Is People
 
Asking for some friends and family I know:
As far as non-GSE loans, Jon Prior at HousingWire mentioned some of the comments from the press conference today about the pending mortgage settlement:


As part of the negotiations, the AGs are working to force servicers to refinance current borrowers into lower-rate mortgages.

"The settlement negotiation is also going to be focused on significantly accelerating the reduction of principal," Department of Housing and Urban Development Secretary Shaun Donovan said Monday.
This sounds like a HARP type refinance program for non-GSE loans (the "accelerating the reduction of principal" is one of the goals of HARP by refinancing into shorter term mortgages). 
Click to expand...

The government really going to be able to force non Freddie/Fannie loans to go through?



Also,  it seems like being current on a mortgage is a requirement.  What about if you are defaulting on other debt?  I know someone (both husband and wife were laid off, now doing 1099 work)  where they have done everything they could so they are current on the mortgage but they missed credit card payments to do this.
 
Rental properties will be A-OK under HARP v 2.0, just as they are today.

You have to be current on your mortgage, but any lates on other debts will cause a significant FICO hit. Normally the LLPA's for FICO are really harsh. Per HARP v 2.0, the LLPA's may be restricted or limited. There are FICO floors for many lenders. Some companies won't finance anyone on a Conventional loan unless the FICO is above 620, HARP or regular financing. If a borrower has a 621 FICO and no LLPA's are being charged by FN / FR, then yes, this program will help a considerable number of people.

Private investors are never going to trade in their 6.0% non-Agency mortgages for a 4.x rate Agency loan. When they talk about principal reduction loans they mean people who trade in a 26 year loan for a 20 year to 15 year fixed loan.

My .02c
 
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