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Obama Unveils New Housing Bailout for Underwater Home Debtors
2011 Oct 24, 7:23am 1,803 views 7 comments
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BayArea
2011 Oct 24, 7:37am
I also heard a radio discussion about this revised HARP plan and have been reading about it this morning.
According to this blog, if you already once refi'd according to HARP since 2009, you are not eligible to do so again.
http://blogs.wsj.com/developments/2011/10/23/twelve-questions-on-obamas-refi-plan/
A paradox within the article: An underwater homeowner wanted to refinance his loan but the bank refused because he couldn't qualify for a new loan due to not earning enough money, so instead he has to continue paying the current mortgage which is $200 higher than it would be with the refi.
Here is a question for the forum members. Obama announced the original HARP plan back in his first year of presidency and the program launched about two years ago yet only 900,000 people have refi'd under it which is 50% of what was projected and a small fraction of total eligible.
Are people not able to get these loans? Do the masses not know about them? Or are so many people beyond 125% LTV (like Vegas or Pheonix) that it doesn't matter?
When will this plan take effect and how much if it is a political stunt prior to the election?
Â¥
2011 Oct 24, 7:56am
Hey, at the rate we are going, it will not be long until presidents can raise taxes and impose laws through executive order. Who needs Congress?
This is for loans already on the GSE books. This is just a good idea, no reason people making payments can't refi their existing balance at today's lower rates.
Hell, all loans should have this built-in already.
FortWayne
2011 Oct 24, 7:58am
From my understanding this bill also mandates Verbal Verification of Income, back to the old days of liar loans. Why even bother paying taxes to the government that does this kind of crap.
Are people not able to get these loans? Do the masses not know about them? Or are so many people beyond 125% LTV (like Vegas or Pheonix) that it doesn't matter?
I looked into it. When rates were lower than 4.5%/30 year fixed I tried to refinance. We make good money, and have 800+ credit scores. We owe 250k and our house at the time appraised for 225k. I wanted to bring cash to closing and refi with a 15 year fixed.
Turns out because we now have less than 20% equity we would have to start paying PMI, and our rate would go from 5.375% fixed to 6% fixed on anothr 30 year! It would mean a few hundred MORE a month.
What a joke.
BayArea
2011 Oct 24, 8:56am
Trude, I hear what you are saying but the whole point of the HARP plan is so you can refi up to 125% LTV without PMI. When did you try to do this?
What you experienced is what I would expect on a standard refi attempt without the HARP plan.
Trude, I hear what you are saying but the whole point of the HARP plan is so you can refi up to 125% LTV without PMI. When did you try to do this?
What you experienced is what I would expect on a standard refi attempt without the HARP plan.
Nope, it was HAMP with my current lender. I didn't qualify for anything other than HAMP at the time wihtout bringing even more money to close. The rates are NOT lower, they are higher, and I was told that it would be a whole new loan and I would have to pay PMI. Maybe this has changed, but it is what they said.
The only way I could get a low rate and not pay PMI would be to bring enough money to close that my loan would again be 80% LTV.
The best part was the closing costs were something like $10,000!
TPB
2011 Oct 24, 9:08am
I'm surpised nobody has mentioned it here yet. Oh, and don't bother writing your member of Congrerss to stop the plan... Obama is doing it through executive order without any Congressional approval. Hey, at the rate we are going, it will not be long until presidents can raise taxes and impose laws through executive order. Who needs Congress?
Don't worry, relax all will be fine, the Republicans wont let him do anything, so I've heard. And he doesn't have such powers to enact actually meaningful legislation. I mean he can't just up tax the rich more, and create a Federal Health care system for all. So certainly he can't do something boneheaded like this. So I've heard.
I'm surpised nobody has mentioned it here yet. Oh, and don't bother writing your member of Congrerss to stop the plan... Obama is doing it through executive order without any Congressional approval. Hey, at the rate we are going, it will not be long until presidents can raise taxes and impose laws through executive order. Who needs Congress?
"The administration has been pressuring government-subsidized mortgage backers Fannie Mae and Freddie Mac to try to re-inflate the housing market by assuming more risk for banks on undesirable borrowers. The agency placed in charge of Fannie and Freddie after they exploded under the weight of the bad mortgages they underwrote has resisted calls for big bold steps to have the insolvent entities assume more risk, but has shown some recent willingness to make small adjustments to make it possible for underwater borrowers refinance their loans.
The current limit says that borrowers can only get a government-backed loan up to 125 percent of a home’s value – not useful in places like the Las Vegas suburbs where many homes are worth less than a third of their price at the height of the housing bubble. Increasing the limit would put taxpayers on the hook, but might help ease the suffering in swing states like Nevada and Florida where real estate speculation heightened the suffering of the Panic of 2008.
He will need the help of the overseer for bailed out Fannie and Freddie, but it could help the president spur a slew of refinancing that would not only increase the cash available to undesirable borrowers each month but might help create an artificial bottom in home prices."
I also found this part about student loans interesting. Is Obama planning on buying the youth vote by wiping out or signifiacntly reducing their student loans? Currently student loans are not dischargeable in bankruptcy. I wonder if this could be changed through executive order...
"Obama will also take unilateral action on student loans in the coming days. With $1 trillion in student loan debt and with Democrats having successfully nationalized educational lending during the early Obama era, the president has broad latitude in setting the terms for repayment or amnesty."
Read more: http://www.foxnews.com/politics/2011/10/24/can-obama-do-stimulus-by-decree/#ixzz1bjjMTsvm
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