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Underwater Refinances - NO Change

By Steven Cook

Industry Observer with No Longer Processing Mortgages. MLO #293441 expired

November 16, 2011 06:04 AM

After all the hype about the changes coming for those whose mortgages were underwater - with Fannie Mae and Seaside Sunset Freddie Mac's revisions on rewriting mortgages the details have been released. There is NO Change!

Basically, what they did in issuing their new guidelins was to put things off until March 2012. Until then the LTV maximum is still going to be limited to 125%. (If you can find any lenders who will go that high - most are limitting to 105%)

Actually, there are two changes that take effect. The first is that Fannie Mae is relaxing the Bankruptcy waiting period -- but you still have to have no lates in past 6 months, and a maximum of one 30 day late in past 12 months. The second change is in the pricing. There will be an additional charge of .75 points where the loan to value is greater than 80% and the term on the owner occupied mortgage is over 20 years.

In five months we might find something else chaning, but not NOW!

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Barbara Altieri

Better Homes and Gardens RE Shore and Country Properties - Shelton, CT

REALTOR-Fairfield County CT Homes/Condos For Sale

Steven -- I am just catching up from yesterday and did not hear this had happened. Thanks for the heads up. I will have to look this up as I had a few friends who were very interested in utilizing this.

Nov 16, 2011 07:41 AM

Steven Cook

No Longer Processing Mortgages. - Tacoma, WA

Barbara -- Thank you for stopping by and commenting. It is sad that the announcement about the changes gets great press, and then when it doesn't arrive, there is no press coverage at all. Creates unfulfillable dreams among the homeowners.

Nov 16, 2011 08:36 AM

Lloyd Binen

Certified Realty Services - Saratoga, CA

Silicon Valley Realtor since 1976; 408-373-4411

Steven,

Are you saying that HARP 2 won't be implemented unti March 2012? The only change at this time is the waiting period for future home purchases, and pricing change? If that's correct, why all the fanfare 4-5 weeks ago when it was announced?

Nov 18, 2011 11:53 AM

Michael S. Bolton

Michael S. Bolton,Inc. - Zimmerman, MN

MN Appraiser

Steven, The media made is sound as if big changes were in the works, and already happening. Apparently this isn't the case. Apparently they don't want to rush into anything too fast!! Thanks for the heads-up.

Nov 19, 2011 11:57 PM

Hi there Lloyd and Michael -- Yes, it would be nice if the actual program implementation would get the same level of coverage that the initial announcement did -- so that everyone would recognize that what was set forth is NOT what is being provided at this time.

It seems that so many of these announcements are the opposite of how we in the service industry operate: under promise and over deliver; they seem to be in the over promise and under deliver boat.

Nov 21, 2011 06:06 AM

Brian Rugg

Rugg Realty LLC Sun City Texas 512-818-6700 - Georgetown, TX

Sun City TX Real Estate - Georgetown, TX Real Est

Hello Steven:

Thanks for the update. We are most fortunate that here is Sun City Texas that these issue are virtually non existent.

Nov 30, 2011 03:04 AM

Brian -- Yes you are fortunate. For those of us in less fortunate surroundings -- it is very difficult to have someone we should be able to help by lowering their payments a couple hundred dollars, not be helped, because they are underwater too much. We have some situations where people are 50% or more underwater.

Nov 30, 2011 05:17 AM

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