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Actual use of the Making Home Affordable Program
So, what do we do when attempting to refinance a property and all of a sudden the value of the property comes in significantly lower than we expected???? Case in point, I am doing a rate and term refinance for a previous customer that purchased their home two years ago (during the height of real estate values for about $400,000. To accomplish an 80% refinance, I only need it to come in at $325,000 but the actual value comes in at $315,000, a huge drop in value and a loan to value of over 82%. So, what do I do? I go to a Fannie Mae DU Plus. This is all part of the Making Homes Affordable Program through Fannie Mae and Freddie Mac.
This program allows me to finance a rate and term for my clients at greater than 80% loan to value with no mortgage insurance. And, because they have excellent credit scores, there is no adjustment to the rate. A definite win-win situation. They get a lower rate with no mortgage insurance and I get to keep them happy.
Now, before everyone jumps up and says, “That is for me!” there are a few conditions. First of all, ... more

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