The Making Home Affordable program may be further expanded to help more underwater homeowners refinance their mortgages.
Though mortgage rates have crept up in recent weeks, current interest rates are more favorable than they have been in the past few years.
However, many homeowners have been unable to take advantage of the low rates thanks to loan-to-value (LTV) constraints, among other things.
The Home Affordable Refinance program currently has a LTV ceiling of 105 percent, meaning even those with no equity or private mortgage insurance can take advantage of the program.
But many borrowers have lost so much equity over the past few years that the FHFA is considering raising that ceiling to as much as 125 percent LTV, according to a Bloomberg report.
Originally, FHFA director James B. Lockhart noted that the line was drawn at 105 percent so loans could be securitized, and also due to capacity constraints.
However, the Obama Administration seems keen to boost participation in the program by easing eligibility, though some argue that it’s too little, too late, as mortgage rates have increased about a point in the past month.
One “mortgage strategist” who spoke with Bloomberg said the enhanced LTV limits could reach another 10 percent of borrowers with Fannie Mae and Freddie Mac loans, but another four percent are even deeper underwater.
To read the original article click here
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Though mortgage rates have crept up in recent weeks, current interest rates are more favorable than they have been in the past few years.
However, many homeowners have been unable to take advantage of the low rates thanks to loan-to-value (LTV) constraints, among other things.
The Home Affordable Refinance program currently has a LTV ceiling of 105 percent, meaning even those with no equity or private mortgage insurance can take advantage of the program.
But many borrowers have lost so much equity over the past few years that the FHFA is considering raising that ceiling to as much as 125 percent LTV, according to a Bloomberg report.
Originally, FHFA director James B. Lockhart noted that the line was drawn at 105 percent so loans could be securitized, and also due to capacity constraints.
However, the Obama Administration seems keen to boost participation in the program by easing eligibility, though some argue that it’s too little, too late, as mortgage rates have increased about a point in the past month.
One “mortgage strategist” who spoke with Bloomberg said the enhanced LTV limits could reach another 10 percent of borrowers with Fannie Mae and Freddie Mac loans, but another four percent are even deeper underwater.
To read the original article click here
Other articles of interest...
Fed plans repo markets revamp
The US Federal Reserve is considering dramatic changes to the giant repurchase – or repo – markets where banks around the world raise overnight dollar loans.
FHA warns it may need assistance top operate
The FHA continues to be overwhelmed by surging loan volume, as evidenced by remarks from Kenneth M. Donohue, Inspector General of HUD.
No recovery for U.S. property markets until 2017
The U.S. urban commercial real estate markets probably will not recover until 2017
Fed meeting gets underway
The Federal Open Market Committee begins a two-day meeting on interest rate policy.
Oil Falls Below $67 on Stronger Dollar, Equities
LONDON--Oil prices fell more than 4 percent to below $67 a barrel Monday as the dollar firmed and concerns about the economy weighed on the market.
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