That's right. They are coming. Although I can't get into specifics without being royally slapped by my company, I as an AVP for Countrywide am privy to some details that run shivers down my spine.
The Homeowner Affordability and Stability Plan (HASP), also known as the Making Home Affordable Plan, was announced by the Obama Administration earlier this month. In the following days, both Fannie Mae and Freddie Mac have released their respective refinance program guidelines to support this plan. While significant work continues across all the lending organizations to implement these parameters, it’s important for you to understand the latest information available on this topic.
At a high level, the refinance programs allow for:
- Refinances of existing lender portfolio customers (Lender-to-Lender)
- LTVs up to 105% • Mortgage Insurance (MI) is not required on loans with greater than 80% LTV IF the previous loan was <= 80% LTV
- The existing MI coverage continues if the previous loan had MI
- No delinquency on the loan in the past 12 months
- Non-owner occupied and second homes are eligible
- Stated income and stated assets are allowed
- No minimum FICO score is required
- Requires no DTI calculation
Lenders at this very moment are still mulling through the details on how they are going to release this program to their perspective portfolios. However, and here is my main point, with the release of "HASP" lenders will start releasing many of the homes/sellers that do not qualify (and most won't) for the Obama plans to the foreclosure attorneys. Note that there has been a moratorium on foreclosure but that has NOT stopped people for vacating and/or not paying their mortgage. The numbers are still growing daily.
Here are some suggestions for you buyers and sellers.
1. If you are a seller. You best sell now. Once the flood of homes hits the market you will be taking a price cut. That low ball offer you just declined may be sounding really good in about 90 days.
2. If you are a Realtor. Explain to your sellers the dangers of not pricing their home correctly now. Be aggressive and get it done.
3. If you are a buyer. Don't bank on this flood of foreclosures leading to a better "deal" for you. If the home listed for 200k today drop 5% in 90 days (which is alot) you are looking at a 10k discount in the price. As demand increases, mortgage applications increase and you watch as rates go up. You have just blown your savings. Now I'm not saying that rates are driven by mortgage applications, but it does play a huge part. Lenders adjust their spreads (hence their rates) based demand and capacity. Also, if you have ever seen one of my graphs, you'll note that rates are at the lowest they have been in like FOREVER. They are not going to a magical 4.5% by the Fed. Don't believe it.
So, I'm out of breath. Get sold, buy now. That's my message. You'd have to be the luckiest person on earth to get the lowest price at the lowest rate. Wait... you are there now!
Comments(0)