Real estate rescue plan. Do you think it will work?

By
Mortgage and Lending with Arthur Buhrer, Olympic Mortgage Services CL 1456034

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.

Comments (6)

TeamCHI - Complete Home Inspections, Inc.
Complete Home Inspections, Inc. - Brentwood, TN
Home Inspectons - Nashville, TN area - 615.661.029

Arthur, I certainly hope so, but I am not going to hold my breath. If this does not work, we are certainly looking at a huge bill to pay...

Your building consultant in the Spring Hill area of Middle TN - Michael

Feb 18, 2009 06:58 PM
Mark Phillips
RE/MAX Hometown - Magnolia, TX

Obama's plan is to have FannieMae and FreddieMac refinance owner occupied homes at 80 ltv and 31% debt to income.  The government would pick up the rest of the amount owed, wether the mortgagee is upside down or not.  If the banks do not want to follow these guidelines they will not be able to receive future Tarp money.  As for  80/20 and SIVA loans there is no place in this market for these loans.  It is time for qualified buyers.

Feb 18, 2009 07:13 PM
Grace Hanamoto
Intero Real Estate - Sunnyvale, CA
Quality, Knowledge, Professionalism, Experience

Hi Arthur, lots of good questions are asked here.  Unfortunately (fortunately??), I don't do loans so I'm not as savvy about the ramifications of the new plan as others may be.  Based on what I've read in the Treasury Department's fact sheet, there are plenty of things to like about the new Homeowner Affordability and Stabilization Plan.  To see it for yourself, which just might bring about more questions than answers, check out the fact sheet and summary at www.treas.gov/press/releases/tg33.htm.  Regarding loan modifications, however, we won't know much about that until March 4 when the Treasury unveils the modfication guidelines.  For now, however, it appears that servicers may particpate in the loan modification program, but will be given only $500 per loan for their efforts.  Again, I'm only about 1/2 of the way through the fact sheet, so I apologize if I'm quoting it incorrectly or incompletely. 

Feb 18, 2009 07:15 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Arthur, I look at it as 90 per cent of the people that got loans were hardworking good people it is the 10 % or less we are focusing on. I believe that all this will do is slow the recovery. Look at the Auto Industry they are back asking a few more Billions. How about helping out the poor Realtors.:)

Feb 18, 2009 07:56 PM
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

I don't think it will be all roses for good responsible borrowers. 

They are not the target consumers. 

Feb 18, 2009 09:27 PM
Arthur Buhrer MLO 114080
Arthur Buhrer, Olympic Mortgage Services CL 1456034 - Sequim, WA
Owner Broker/ Washington State

I stil haven't done a DU refi plus loan yet. Everytime I price one it doesn't make sense. The borrowers are better off staying where they are or they are totally out of luck and going to lose the home.

I have known a couple of borrower who were able to negotiate a loan modification on their own directly with the lender/servicer of their loan.

Oct 02, 2009 05:39 PM