The new Obama Plan, and…
Commentary on the current state of proposed mortgage plans, or:
How will all of these plans work? Or will they?
Wondering what in the world is going on and what good will it do? Here’s the deal:
Current FHA Loans: If you currently have an FHA loan and your rate is at least 5.000% you can likely lower your rate and payment for little to no cost. Contact me for the low down.
“Underwater” loans: Go here: http://mijoymortgage55.blogspot.com/2012/01/underwater-whats-up-with-harp-20.html.
From Mortgage Daily 2-2-12:
The HARP 2.0 initiative is aimed at helping agency (Fannie/Freddie) homeowners to refinance. Then came HAMP 2.0 (this past Friday), aimed at helping to encourage more modifications.
Then, Obama unveiled a separate refinancing program (discussed below) targeted at non-agency homeowners (making refinancing easier for mortgages not backed by Fannie or Freddie). Finally, in the coming days/weeks we could get a final foreclosure settlement as well as a plan to sell foreclosed homes in bulk. In aggregate, all these policy moves could help at the margin but most believe they fall short of some grand Fannie/Freddie automatic refinance plan for which some investors had hoped. Maybe we're done with government initiatives for the year? Perhaps not - don't forget chatter out there about the foreclosed properties sitting on the agency's balance sheets, and large scale plans of selling them to investors. And we have some type of possible settlement between the state's AG's and large servicers...
Regarding President Obama's election year housing plan, which is probably going to require Congressional approval, and is therefore highly unlikely...there are fact sheets ranging from 7-10 pages. It certainly gave investors something to talk about yesterday, even if it will take many months, if at all, to roll out. There is too much to reproduce here, check out the original. Most believe that this plan will not pass through Congress, given the level of political polarization. And it is difficult to understand why the Administration thinks it can get this proposal through Congress when it cannot get the parts that do not need Congressional approval through the GSE's (Fannie & Freddie) and FHFA (a federal agency). If rising pressure on the GSEs does lead to them to adopt the agency components of this plan, there will be an enormous effect on agency MBS (Mortgage Backed Securities).
One statement noted, "... believe these steps are within the existing authority of the FHFA. However, to date, the GSEs have not acted, so the Administration is calling on Congress..." Most of the proposals for the plan do not need Congressional approval but the Administration is implying that the main reason to send these proposals to Congress is that the Administration cannot get the GSEs (and presumably FHFA) to do what needs to be done "in the taxpayer's interest..." Consequently, this public proposal seems to be a way to put pressure on the GSEs and FHFA to do what the Administration wants. I guess this is how modern government functions...
So please dig into the fact sheet noted above - that is what the market knows.
Consumers should probably not become too enamored or bogged down in the plan, as it will take, if it happens at all, several months to sort out, digest, and implement.
OK, there you have it. Still confused? Contact me...better do it now... Before you lose it and go off and do something crazy.
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