AtomicCEO Posted March 4, 2009 Share Posted March 4, 2009 http://money.cnn.com/2009/03/04/news/econo...sion=2009030409 It looks like there are two parts to this: - People having trouble making mortgage payments are eligible to restructure their loans - People not having trouble can still refinance to a lower rate if they have less than 30% equity. I'm not in trouble... so the second part applies to me (maybe most of us). The refinancing program, which is open to homeowners who took out loans from Fannie Mae and Freddie Mac, allows borrowers with less than 20% equity in their homes to refinance to the current prevailing rate. However, borrowers cannot owe more than 105% of the value of their home and must be current on their payments. My mortgage is through Wells Fargo... is it backed by Fannie Mae and that's good enough, or did the loan have to originate from Fannie Mae in some way? I don't understand this limitation or what it is aimed to accomplish. Also, are some fees waived in this refi process? Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted March 4, 2009 Share Posted March 4, 2009 (edited) I don't know for sure, but I don't think any loans are serviced through fannie mae. but all or most non-jumbo loans (i.e., "conforming loans") are backed by them. like my loan was originated through quicken, then sold or whatever to GMAC...but I know they had to submit something to fannie and wait for approval or whatever. I dunno, I could totally be wrong on that but I am guessing you might be eligible. Edited March 4, 2009 by Azazello1313 Quote Link to comment Share on other sites More sharing options...
wiegie Posted March 4, 2009 Share Posted March 4, 2009 (edited) My mortgage is through Wells Fargo... is it backed by Fannie Mae and that's good enough, or did the loan have to originate from Fannie Mae in some way? I don't understand this limitation or what it is aimed to accomplish. As long as it is backed by Freddie or Fannie, you are good to go. The limitation was put into place because (contrary to many assertions otherwise) Freddie and Fannie-backed mortgages were "better" than many non-backed mortgages. So in this sense, the plan is designed to be limited to people who in general were considered reasonably decent borrowers at the time they took their loans out (and the plan will be much less likely to benefit people who took out the riskiest type mortgages). Edited March 4, 2009 by wiegie Quote Link to comment Share on other sites More sharing options...
AtomicCEO Posted March 4, 2009 Author Share Posted March 4, 2009 As long as it is backed by Freddie or Fannie, you are good to go. The limitation was put into place because (contrary to many assertions otherwise) Freddie and Fannie-backed mortgages were "better" than many non-backed mortgages. So in this sense, the plan is designed to be limited to people who in general were considered reasonably decent borrowers at the time they took their loans out (and the plan will be much less likely to benefit people who took out the riskiest type mortgages). Well good then. That Obama vote is finally paying off in cash. Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted March 4, 2009 Share Posted March 4, 2009 As long as it is backed by Freddie or Fannie, you are good to go. The limitation was put into place because (contrary to many assertions otherwise) Freddie and Fannie-backed mortgages were "better" than many non-backed mortgages. So in this sense, the plan is designed to be limited to people who in general were considered reasonably decent borrowers at the time they took their loans out (and the plan will be much less likely to benefit people who took out the riskiest type mortgages). fannie and freddie backed plenty of subprime loans. fannie and freddie are "participating" because the government can force them to participate. they are trying to get other servicers to participate as well. Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted March 4, 2009 Share Posted March 4, 2009 http://money.cnn.com/2009/03/04/news/econo...sion=2009030409 It looks like there are two parts to this: - People having trouble making mortgage payments are eligible to restructure their loans - People not having trouble can still refinance to a lower rate if they have less than 30% equity. I'm not in trouble... so the second part applies to me (maybe most of us). My mortgage is through Wells Fargo... is it backed by Fannie Mae and that's good enough, or did the loan have to originate from Fannie Mae in some way? I don't understand this limitation or what it is aimed to accomplish. Also, are some fees waived in this refi process? Check what you wrote vs your link, you can only refinance if you have less than 20% equity, not 30% like you had written. Most people I know (responsible people) try to put down 20% to avoid having to pay PMI. This program makes me sick. It rewards the irresponsible, but hey apparently that is what this administration is all about. We are going to bail out he people that were dumb enough to get a loan the knew they couldn't afford, and the companies that were dumb enough to give the loan, and we are going to screw the responsible tax payer. Quote Link to comment Share on other sites More sharing options...
driveby Posted March 4, 2009 Share Posted March 4, 2009 Check what you wrote vs your link, you can only refinance if you have less than 20% equity, not 30% like you had written. Most people I know (responsible people) try to put down 20% to avoid having to pay PMI. This program makes me sick. It rewards the irresponsible, but hey apparently that is what this administration is all about. We are going to bail out he people that were dumb enough to get a loan the knew they couldn't afford, and the companies that were dumb enough to give the loan, and we are going to screw the responsible tax payer. Hope and change we can believe in. Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted March 4, 2009 Share Posted March 4, 2009 Check what you wrote vs your link, you can only refinance if you have less than 20% equity, not 30% like you had written. well if you've got >20% equity, participating in this program would be totally pointless, since anyone will give you a refi at current rates. Quote Link to comment Share on other sites More sharing options...
wiegie Posted March 4, 2009 Share Posted March 4, 2009 fannie and freddie backed plenty of subprime loans. yes, but I am pretty sure that they weren't backing the worst of the subprime loans Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted March 4, 2009 Share Posted March 4, 2009 fannie and freddie backed plenty of subprime loans. fannie and freddie are "participating" because the government can force them to participate. they are trying to get other servicers to participate as well. What do you want to bet that Citi will be "participating" as well? Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted March 4, 2009 Share Posted March 4, 2009 well if you've got >20% equity, participating in this program would be totally pointless, since anyone will give you a refi at current rates. Yes, but I want that 2% money that the really irresponsible people are getting for the next two years, and the have them just move me up to 5%. Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted March 4, 2009 Share Posted March 4, 2009 (edited) yes, but I am pretty sure that they weren't backing the worst of the subprime loans whether that's true or not (probably is), I am pretty sure the worst of the subprime loans weren't given to people who are now less than 5% underwater and have never missed a payment. you're right that this portion of the plan (as opposed to the other portions) is aimed to Josh Gordon out and exclude the irresponsible buyers who just can't pay their mortgage -- but I think it's the conditions I just listed which Josh Gordon them out, not the limitation to fannie and freddie. Edited March 4, 2009 by Azazello1313 Quote Link to comment Share on other sites More sharing options...
AtomicCEO Posted March 4, 2009 Author Share Posted March 4, 2009 Check what you wrote vs your link, you can only refinance if you have less than 20% equity, not 30% like you had written. Most people I know (responsible people) try to put down 20% to avoid having to pay PMI. This program makes me sick. It rewards the irresponsible, but hey apparently that is what this administration is all about. We are going to bail out he people that were dumb enough to get a loan the knew they couldn't afford, and the companies that were dumb enough to give the loan, and we are going to screw the responsible tax payer. well if you've got >20% equity, participating in this program would be totally pointless, since anyone will give you a refi at current rates. Also, this seems like it's really targeted at is falling home prices. I assume that there are a lot of people who put down 20% who may still have no equity because they owe more than it's worth right now. Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted March 4, 2009 Share Posted March 4, 2009 Also, this seems like it's really targeted at is falling home prices. I assume that there are a lot of people who put down 20% who may still have no equity because they owe more than it's worth right now. As much as it pains me to admit it, good point. Still the drop in the value of their house should in no way increase the amount of their mortgage which they agreed to pay correct? Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted March 4, 2009 Share Posted March 4, 2009 As much as it pains me to admit it, good point. Still the drop in the value of their house should in no way increase the amount of their mortgage which they agreed to pay correct? and it doesn't. at least not under that portion of the plan. it simply allows you to refinance the amount you owe at current rates. doesn't change the amount you owe in any way. the government's role, as far as I can tell, is only to step in and back you so that the 20% equity thing isn't an obstacle to refinancing. Quote Link to comment Share on other sites More sharing options...
Savage Beatings Posted March 4, 2009 Share Posted March 4, 2009 So then what are current rates approximately? Quote Link to comment Share on other sites More sharing options...
alexgaddis Posted March 5, 2009 Share Posted March 5, 2009 How are they determining the value of a home? An approved appraiser? An AVM? Quote Link to comment Share on other sites More sharing options...
Avernus Posted March 5, 2009 Share Posted March 5, 2009 (edited) How are they determining the value of a home? An approved appraiser? An AVM? this would open the door up for all kinds of appraisers to put some work in... edit: AVM still can't do what human eyes can do.....but it sure is a helpfull tool for an appraiser to get his job done and if anything, an appraiser will have to charge less for their time to keep themselves in business... Edited March 5, 2009 by Avernus Quote Link to comment Share on other sites More sharing options...
muck Posted March 5, 2009 Share Posted March 5, 2009 I've been wondering if the mortgage insurance company that I'm currently paying PMI to went belly up, could I quit paying PMI? Quote Link to comment Share on other sites More sharing options...
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