There is a lot of hype surrounding this. However, I don't think it will be all roses for good responsible borrowers.
These new loans will have to be FHA. How else are they going to insure them and the lenders who originate them? That means funding fees and monthly MI. Just to get down to 4% ??
What about the loan modifications? Will that be something a broker will be able to do? OR Are they going to rely on the lenders just like the failed HOPE program?
Solution: Get Fannie and Freddie to play nice and move in a positive direction. They can remove all adverse market overlays, ltv restrictions, etc.. Bring back verbal verification for solid borrowers, and some SIVA loans for certain Borrowers. Take away hits for investment properties. Now I am talking about balance here. I am not suggesting that they open these programs to everyone.
Where are those 80/20's so that the MI companies can jump off a cliff?
Will conventional get a piece of the action here? Are they awaiting the subsidy and jacking up rates in the mean time to get more government cheese when it comes?
Please comment.
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