The government appears to be finally understanding how many Americans are upside down in their homes.

As I've been predicting for months, the FHFA just announced today that they will be allowing FNMA & FHLMC to refi underwater homeowners up to 125% of their property's value.

Previously the cap was at a joke amount of 105% LTV, resuting in President Obama's hyped Home Affordable & Stability Plan being way behind on the estimated number of homeowners it was meant to help.

It would have been better if they would've done away with the appraisal requirement on refinances all together, but this should help a decent amount of homeowners not eligible under the previous program

Now, keep in mind that this will take awhile to be implemented as a lot of software needs to be rewritten. Also, the when the government approved the 105% LTV, FNMA & FHLMC both added pricing hits, which offset some of the gains of lower rates. I would hope they don't do the same this time. Lastly, lets hope FNMA & FHLMC allow more lenders and brokers to do these loans. Right now, FHLMC forces homeowners to only go to their current lender. These lenders are prety backed up, some taking 60-90 days or more to close these loans.

If you think you may qualify under this new guideline, contact me ASAP as I expect a flood of refinance applications to hit the industry quickly. With rates off their lows, waiting could cause you to miss a rate opportunity.