Mortgage Refinance for Underwater Home Mortgages but Good Credit
Various Forms of Assistance for Responsible Homeowners
The latest effort of the Obama administration to assist the housing market is aimed at homeowners with solid credit and is making on-time payments on their mortgages but is unable to refinance because they own underwater homes in falling markets.
President Obama is set to announce his plan in Nevada, a primary state that he hopes to win in 2012. Since the peak of the housing market bust, the prices of home in Nevada fell by 53%. In the metro area of Las Vegas, the prices decreased by 59%. It has been reported that there has been no refinancing activity for borrowers who are underwater in the area. The president’s plan is designed to change this.
A series of changes that will lighten the load of responsible borrowers at the moment will be announced. This is to help them take advantage of the good mortgage rates at present. According to the new regulations, homeowners with good credit who has missed a payment for a period of one year can still be considered as a responsible current borrower.
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The advice of the administration officials is that the homeowners will no longer be requested to get an appraisal or required to undergo a full credit check. According to the official, if the payments have been current, it is already the lender who owns the risk. They also plan to get rid of the so called risk based fees that are currently charged on bad credit homeowners. This will raise the benefits of refinancing and eliminate hassle.
The administration official informs the CNN that they have been working out and coordinating the issue with FHFA and the banks. Then, the FHFA will contemplate on the proper guidelines and inform banks about them by November 15. Homeowners can start applying for the refinancing until after the 15th of November.
Between the present days until the 15th, the FHFA can think of including another category of homeowners in the plan. It is possible that the changes will be extended to bad credit homeowners who have home equities and have been current in their payments.
A government official shares that plans are continuously made to address the larger housing problems that affect the entire market. These will be announced in the future.
Previously, the administration already announced the forbearance for homeowners for up to one year if they lost their jobs. This allows homeowners to delay mortgage payments while unemployed.
Related articles
- U.S. throws lifeline to underwater homeowners – Reuters (news.google.com)
- Refinancing plan for US mortgages (bbc.co.uk)
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Tagged with: Barack Obama • CNN • Federal Housing Finance Agency • FHFA • mortgage loan • Nevada • Obama administration • refinancing
Filed under: home loans
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