Housing – Details on FHA Refi program launching next month
Another update, courtesy of CR and Diana Olick, HUD says no talks underway for another FTHB tax credit. Good, it is useless:
Diana Olick at CNBC contacted HUD today: Another Home Buyer Tax Credit?
[A] HUD spokesperson … responded: “No news here…there are no discussions underway to revive the credit.”
Here’s a song for anyone suffering through HAMP or HousingHell-
Above the post update- from Sunday:
HENRY: But in May, you said we are beginning to turn the corner (on housing). Can you still say that? Are we still turning the corner when these numbers are so awful?
DONOVAN: Ed, compared to where we were — and I am talking about where we have been for the last 18 months, the housing market, no question was significantly better. The issue now and what we are focused on is the future.
Shaun Donovan, HUD Chief, was telling America Sunday that HAMP worked just fine! I cannot even laugh at that having been in the Eighth Circle of Hell known as the HAMP application process.
So 500,000 people were strung along, paid on time, and were then kicked off the program and out of their houses much worse off financially and emotionally, and that was fine, right Donovan? the important thing was to protect TBTF from taking hit on inventory flooding markets right ? Man these folks pixx me off. And just how did that work out? WE ARE IN THE EXACT SAME POSITION!
In fact, it is worse. NOW homeowners no longer TRUST these half axxed Govt programs, they KNOW we are being strung along, so now WALK AWAY is in the minds of the middle class, FAIR GAME. You MORONS are BREAKING the PARADIGM!
Continuing the ‘doing everything but the right thing’ meme, HUD is rolling out another iteration of help for homeowners that shovels tax $ to TBTF without actually, you know, HELPING the actual homeowners.
Maybe this will be done as the MS White Paper suggested which I think makes sense. If not, it is a drop in the bucket of overflowing programs that just prop up TBTF and do nothing to address the underlying issue: consumer balance sheets MUST be fixed to get the economy growing again, period.
According to a mortgagee letter sent out today, the new program would provide additional refinancing options to underwater homeowners starting Sept. 7. To be eligible for the new loan, the homeowner must be underwater but still current on the mortgage. A credit score of 500 or better is required, and once refinanced and insured by the FHA. The new refinanced loan must have a loan-to-value ratio of no more than 97.75%.
The borrower’s existing first-lien holder must agree to write at least 10% of the unpaid principal balance, and it must bring the borrower’s combined loan-to-value ratio on that first mortgage to no more than 115%. The existing refinanced loan cannot be an FHA-insured one.
Over the last 18 months, the Federal Housing Administration (FHA) has insured 30% of purchases and 20% of refinances in the housing market. During that time, FHA also helped 1.1m homeowners refinance and insured 1.4m mortgages. More than 80% of those were for first-time homebuyers.
Donovan said the refinance program will target the growing number of underwater borrowers, who owe more on their mortgage than their home is worth…
God Bless America. I hope this saves some homes for some families. TBTF does not need anymore of our tax $ they are sitting on over a trillion already.
Update: Oh look, Trez has decided GSE backed mortgages, will NOT be aLLOWED TO PARTICIPATE IN THE PROGRAM! tHE EXACT OPPOSITE OF WHAT needs to happen, sorry damned caplock! I dont have time to fix it, here you go:
KBW said the FHA refi program is unlikely to have “any meaningful impact” on agency MBS, because only 8% of Freddie Mac and 14% of Fannie Mae mortgages have LTVs in excess of 100%. Additionally, the firm noted the Treasury Department has said the government would not consider allowing the GSEs to write-down underwater mortgages.
So IOW it is another BS head fake program to slow inventory. They wont be happy until housing takes the economy down again, it is already happening. The stupid it burns!