Monday, October 24, 2011

Hope that I can refinance my Mortgage.

Courtesy of Reuters:

Reuters) - A leading U.S. housing regulator on Monday announced changes to a government refinancing program that could help up to one million homeowners whose homes are worth less than their mortgage.

The Federal Housing Finance Agency, which oversees mortgage finance giants Fannie Mae and Freddie Mac, said it was easing the terms of the two-year-old Home Affordable Refinance Program, which helps borrowers who have been making mortgage payments on time but have not been able to refinance as home values have dropped.

To help underwater borrowers, or those whose loans are worth more than their homes, FHFA said it will scrap a cap that prohibits any homeowners whose mortgage exceeds 125 percent of the property's value from participating in HARP, which is targeted at loans backed by Fannie Mae and Freddie Mac.

The plan, targeted at borrowers who hold loans backed by Fannie Mae and Freddie Mac, is the latest government effort to deal with a problem at the center of the economy's weak recovery -- a crippled housing market.

"Our goal in pursuing these changes is to create refinancing opportunities for these borrowers, while reducing risk for Fannie Mae and Freddie Mac and bringing a measure of stability to housing markets," FHFA's acting director, Edward DeMarco, said in a statement.

After meeting with DeMarco earlier this month, one lawmaker said the expanded program could help as many as 600,000 to one million borrowers. But that is only a fraction of the estimated 11 million homeowners who are underwater.

President Barack Obama will showcase the changes at a stop on Monday in Nevada, the first leg of a campaign-style swing through western states that may be crucial to his re-election in 2012.

To encourage banks to participate in the program, FHFA is revamping it to protect lenders from having to buy back HARP loans if underwriting problems are later found. Banks will only have to verify that borrowers have made at least six of their last mortgage payments and the new rules eliminate the need for appraisals in most cases.

FHFA said government-controlled Fannie Mae and Freddie Mac will waive certain fees for borrowers that refinance into loans with a shorter term, such as 15 years, aiming to spur homeowners to pay down the amount they owe at a faster rate.

HARP, one of the Obama administration's anti-foreclosure efforts, was unveiled in March 2009 and was expected to help as many as 5 million borrowers. So far, however, only about 894,000 borrowers have refinanced their loans through the program.

FHFA said it will extend the effort until December 31, 2013. The program is limited to loans that Fannie Mae and Freddie Mac guaranteed before June 2009.

Wish me luck everybody. I have a Fannie Mae loan at 6.5% interest. I have never missed a payment. However I was not eligible for the program because my condo was worth way less then the 125% guidelines. I am going to speak with someone during the next week and see if I can get a refinance done, possible even to a 15 year mortgage and save myself the fee's. With today's 15 year mortgage rate at 3.5% that's 1/2 of what I am paying now. Plus I would get my house paid off 10 years sooner. I will give it a try and keep you all posted.

Thursday, October 20, 2011


In an interview published Tuesday ahead of presidential debate, Romney told Las Vegas Review Journal's editorial board that solving the foreclosure crisis would require letting banks proceed against homeowners who have defaulted on their mortgages. New investors could then rent out the homes until markets adjusted.

"As to what to do for the housing industry specifically and are there things that you can do to encourage housing: One is, don't try to stop the foreclosure process. Let it run its course and hit the bottom," Romney said.

Romney elaborated during the presidential debate Tuesday night. "The idea of the federal government running around and saying, We're going to give you some money for trading in your old car...or we're going to keep banks from foreclosing if you can't make your payments...", Romney said, "The right course is to let markets work."

I can't agree more with Romney. I have been saying this since 2008!
The best thing the government can do to help the housing market is to do nothing. Things will get very bad, people will get foreclosed on...but magic...the free market will take effect when prices get low enough to encourage people to buy. Then the price of housing will rise again as the housing market begins to feed on itself in an upward trend.

Ron Paul has my vote for 2012. However, Romney has the right idea on housing.

Tuesday, October 18, 2011


I would be wrong to say that the housing bubble and crash was the only cause of my failed marriage. However, I would say that it definitely was a contributing factor to it. My now ex-wife hated my condo. I really believe that when she was faced with the prospect of having to move back into it this spring, she decided to "explore her other options".

Now after helping her study, and pay her way through school, she has an education, a higher paying job, and no condo debt. She is now able to purchase the house she wants and live happily ever after.

I am stuck with a condo that is worth about $30,000....and I owe around $63,000 on the mortgage. I also have an additional 24,000 of "equity" into it (I payed $87,000 for the property in 2006) so there is no way I can just walk away since I have so much of my actual money invested into the property. On the bright side, I am graduating this December, Unfortunately, I still have another year of an unpaid internship to go before I too can make use of my degree and earn a higher salary.

My wife was not who I thought she was, and I am glad she is gone. But I must admit it is depressing that my financial situation now seems very hopeless while she gets a fresh start. I know what goes around comes around, and someday she will have done to her what she did to me...until then...

...I guess that is just the way life works out...

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