OBAMA PLAN/ National Refinance Legislation Proposal

By
Mortgage and Lending with CrossCountry Mortgage Inc NMLS# 235090

Obama's proposal, the key points are as follows, many of which are actually pretty good.

1) Extend the HARP eligibility date to May 31st 2010. (The bill mentions that May 31st 2010 was chosen because most of the loans originated after this date already have a mortgage rate below 5%.)

2) The bill would direct the GSEs to require the same streamline underwriting process, and associated reps and warranties for new servicers (cross servicer) as they do for existing servicers (same servicer), removing some barriers to competition.


3) The bill would eliminate employment and income verification requirements, thereby allowing a simple pre-approved refinance package to be sent to a borrower that only needs to be signed and returned - further streamlining the process.

4) As a result of the bill, lenders who do not permit a second lien re-subordination to a refinance loans, as long as that it does not increase the risk to the second lien holder, will be prohibited from receiving GSE guarantee for new loans. Similarly mortgage insurers who refuse to transfer coverage to the refinance loan will be prohibited from new business with the GSEs - a penalty.

5) The bill also advocates extending the HARP 2.0 program not just to LTV >80, but also to borrowers with LTV <=80.

6) The bill would prohibit the GSEs from charging LLPAs on a Fannie-to-Fannie or Freddie-to-Freddie refinancing. And lastly,

7) it would eliminate appraisal costs - for borrowers who still require a manual appraisal, possibly because they live in communities where there haven't been many recent sales, the bill suggests that the GSEs provide alternatives to manual appraisals in order to reduce overall cost and time to refinance.

 

 

Will keep everyone posted, lets keep our fingers crossed, because this actually sounds like it would work!!

 

Happy Fundings!

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