Special offer

Government Plan B: Refinancing for All Those Facing Foreclosure

By
Real Estate Agent with Home Expo Gallery, LLC (Keller Williams)

A few days ago, talking with a loan officer about the government's plan to give a stimulus for the lenders to refinance the loans that are in default, and the government would commit to buying them.  This loan officer told me that "the government does not obligate the lender to do this, it is only a suggestion that they make to the lenders, but they are not obligated to do so."

Now, let's look at the reality: in order to refinance any property, the first thing that must happen is an appraisal.  It is no secret that in several states, people owe more than their houses are worth. 

Some questions would be:

  • Who is going to pay the difference between the refinanced amount when the property does not appraise for the loan value?
  • If the property does not have any equity, who will be responsible for paying for the months the borrower is behind, and refinance it for the same value as when the person first purchased it years go?
  • Will the lender pay the closing costs, including the appraisal?

At the end of the day, the lenders will be able to use this money for other types of transactions, and the benefit will go only and exclusively to the lenders.

Personally, I hope that they use some of that money to create a Loss Mitigation department that is more efficient and quick, and the Short Sales can move more rapidly with a timeframe more acceptable for the serious buyers.

Take a look at what the short sale process is like, and give me a call to see how I can help you.  And leave a comment here telling us what you think of how the bailout is being managed and what the government should do now.

Comments (0)