Why is Obama's MakingHomeAffordable.Gov website giving this Home-Wrecking Advice to Homeowners?
With alot of banks going out of business and the mortgage brokers painted as the bad guy, home owners don't know who they can trust to get honest information about their home loan needs. Alot of people have gone to Obama's MakingHomeAffordable website, hoping that they can get the information they DESPERATELY need. With Foreclosures and Unemployment nearing record levels, making the wrong choice is costing families the very roof over their heads. So in response to the advice I see on his website, all I can say is WHY!! WHY!! WHY!!
I got a SERIOUS beef with Obama on this one. Why does this website tell people that if they owe more on their house, they are screwed to get a refinance? I wonder when they put this website together, did they happen to consult that part of the government that is responsible for over $1 trillion dollars of today's mortgages, you might have heard of it, the FHA (Federal Housing Administration).
Then you got these so called 'experts' telling people the same thing. Like this guy : http://www.heraldnet.com/article/20090906/BIZ/709069937/-1/COLUMN#What.you.can.do.if.you.can%26%23146t.refinance
Or this guy on Fox Business News (forward it to the 2:00 point)
But as I have done MANY MANY times for clients, this is what I can do. It is also my response to the 'expert' who wrote the article above : "Not to disrespect you Steve, but your advice is incorrect in relation to this gentleman. While FHA has a 97.75% Loan To Value limit, it has no CLTV(Combined Loan to Value Limit). So what you can do is refi your current 1st to 97.75%, which is most likely a higher loan amount that your current 1st. The difference you use to pay down your 2nd. You send in a Subordination Agrement to the bank that has your 2nd. For them to agree to this, you must show that they are lowering their current risk, which you would be by lowering your rate in your 1st, making your 1st a fixed rate, and that you are paying them cash at closing. In the Seattle market, I have had almost a 100% success rate with this. Some banks that offer FHA have additional risk layers (they won't go over 100% CLTV), but there are plenty that still do."
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