Here it is a month after the Home Affordable Programs got up and running. Well, more like a week, since many lenders did not come out with the pricing on the Fannie Mae DU Refi Plus until within the past couple of weeks, and only a few are coming out with the Freddie Mac Relief Refinance pricing.

Here are some discoveries/experiences I've encountered.

On Home Affordable Refinance:

Private Mortgage Insurance Companiesare restricting the transfer of their mortgage insurance policies to the existing lender/servicer only, eliminating the homeowners' opportunity to shop for their pricing and eliminating competition.

Banks/Mortgage companies holding second mortgages, like the private mortgage insurance companies, are not playing ball. They have implemented lower criteria for their subordination policies than we've ever seen (which is saying something from this mortgage consultant who has been in the business since 1983), effectively removing the possibility of an eligible homeowner refinancing their first mortgage under the Home Possible Refinance Program. The occasional exception to this is the lender who holds both the existing first and second and may consider re-writing the first while subordinating their existing 2^nd to their own new 1^st. Again, eliminating the homeowners' opportunity to shop for their pricing and eliminating competition.

Freddie Mac Relief Refinance pricing coming out from the very few banks/mortgage companies who have released it on the Freddie Mac Relief Refinance is so high, it effectively eliminates the homeowners' chance of gaining enough savings to warrant refinancing.

Many investor types are not covered under the Home Affordable Programs, leaving a large percentage of ineligible homeowners, and as of May 1^stwith the associated expanded guidelines, investors. Anyone whose home loan was "portfolioed" by their existing lender, an FHA loan (new hope on the horizon here, though...stay tuned for new changes to the Help For Homeowners program), a VA loans, a Mortgage Revenue Bond/ State Housing Finance Agency loan, or had one of the myriad of private investors, too bad so sad you are not covered by the Home Affordable Programs.

Basically, the eligible candidate for the Home Affordable Refinance with the most chance of success -

a) has one mortgage against their property,

b) their existing mortgage did not have private mortgage insurance associated with it,

c) their property is outside of the areas that experienced severe property value declines, so they don't exceed 5% in negative equity when the new Home Affordable Refinance loan goes in place,

d) has an existing mortgage on which Fannie Mae is the investor

I'm still investigating experiences/stories associated with the Home Affordable Modification programs, so stay tuned. There are many variables, and many options.

The Home Affordable Programs are meant to help people, but are giving every appearance of a dog chasing its tail.

And, when that tail gets caught, it's got to hurt!

The banks are slammed, unable to keep up with the volume, yet steps have been taken by these same banks and private mortgage insurance companies to remove potential competition. Is this REALLY of benefit to the homeowner these programs are meant to serve the needs of? Will having such a narrow focus accomplish what is supposed to be the ultimate goal of turning the US economy around by stemming the unheard of volume of foreclosures? Come on President Obama and Senate Banking Committee - you need to invite some more well rounded voices to your table when you are hashing these plans out! AND listen to them!

See you at the closing table! 

Karen Cooper - OR/CA Mortgage Consultant - www.Quality4Loans.com

Other articles on these topics:

REAL Help For Struggling Homeowners On The Horizon

Ready...Set...Go! Making Home Affordable Programs Readying for Release April 4, 2009

Home Affordable - When No May Not Necessarily Mean No Anymore

And They're Off! Home Affordable Refinance Program Released

Riding the Rollercoaster of the Home Affordable Refinance

Beware! Not All Note Modification and Short Pay Negotiators Are The Same!