So the news Media has been Harping on two subjects lately regarding the mortgage industry, I figured i would really quickly touch on both of them.
First, Rates. Rates again are pushing all time lows in the 3's and APR's in the high 3's or low 4's. Now truly is a great time to buy or refinance.
I recently refinanced a client who had a 30 year fixed rate of 6.25%. We refinanced them to a 15 year loan and there payment only changed by $6 per month.
If you know anyone who is thinking about buying or refinancing, please have the give me a call. Greg Novak 386-846-6686
Second, "THE Obama Loan." I have received a number of calls from people seeking information on the new "Obama Loan". I figured a lot of people are probably curious about the loan and what the actual facts of what the program entail.
1st - Lets get my political opinion's out of the way. The Media hype and spin Washington has put on this loan is not a whole lot more than campaign efforts to help with their re-election. Once again, Washington has failed to come up with a program to help the people who need it the most.
2nd - Facts about this loan. It already Exists. The actual name of this loan is HARP 2.0. It's predecessor and current sister loan HARP 1.0 has been out and in the tool belt of the mortgage industry for over 2 years now.
3rd - Facts about the current program. The HARP loan was designed for people who currently are able to make their mortgage payments and have not had any late payments in the last 12 months. The applicant for HARP must be able to prove income, assets, and credit worthiness. Qualifying for a HARP loan is basically the same as qualifying for a standard fannie mae mortgage refinance, with one exception, the Loan to Value. HARP currently allows you to refinance your current 1st Mortgage as long as your total combined Loan to Values, including all subordinated loans does not exceed 125% of the appraised value. You can not combine first and second mortgages together. The second mortgage must be willing to re-subordinate and the total can not exceed the 125% loan to value.
4th - The Change. HARP 2.0, "The Obama Loan" only changes one thing, and that is the loan to value restriction. HARP 2.0 is supposed to remove restrictions on loan to value allowing home owners to refinance their home regardless of what they owe on it vs how much it is worth. You still can not combine firsts and second mortgages, and contrary to what seems to be a popular belief, the government is not going to reduce your loan balance down to what the appraised value is.
5th - The bad news. The bad news is that although this mortgage was supposed to take effect in the beginning of November, Fannie Mae has announced that they will not be adjusting their underwriting systems to the new program until at the earliest March 2012. Therefore, lenders will be unable to sell loans based on the new guidelines and will not be offering them until that time. Additionally, current speculation is that no lender is actually going to allow unlimited Loan to Value. It is expected that the current 125% max will increase, but lenders will impose their own overlay's based on their own desired risk tolerances for LTV.
6th - The Good News. The good news is that, as I stated before, this loan already exists. You can have all of the benefits of this new great super loan right now with one exception, and that is the max 125% loan to value. So if you think that you may benefit from this loan and you owe less that 125% of what your home is worth, give us a call. Greg Novak 386-846-6686
Here are a few links to some news articles regarding the Updated HARP 2.0.
HARP 2.0 – The New Mortgage Plan http://smartmortgageadvice.com/?p=942
Sizing Up HARP 2.0 http://www.smartmoney.com/spend/real-estate/sizing-up-harp-20-1322685479452/
HARP 2.0 rules, and who will benefit http://www.marketwatch.com/story/harp-20-rules-and-who-will-benefit-2011-11-18
The Official Website Home Affordable Refinance Program (HARP) http://www.makinghomeaffordable.gov/programs/lower-rates/Pages/harp.aspx
It's a Good Life!!!
Greg Novak MBA
NMLS # 329079
Vice President / Partner
American Mortgage
Cell - 386-846-6686
Office - 386-756-8228
Fax - 386-756-8108
Website - http://www.americanmortgagenow.com/
Oh, by the way, If you know someone who is thinking about buying or refinancing a home, please give me a call with their name and number, I will be happy to follow up with them for you.
FLORIDA- American Mortgage Loan Services, Inc. - NMLS Company ID 330596
