New Obama Refinance Plan to Help Millions or Hundreds? Denver Colorado
The Obama administration announced today that they will be providing increased help to home owners who are struggling to make house payments or are upside-down on their mortgages. The New Obama Refinance Plan does not have a set inception date, but it is rumored that the plan will last three to four years and could help millions of home owners avoid foreclosure.
The New Obama Refinance Planwill reportedly not bring more tax burden upon consumers, but will tap into a estimated $14 billion of the allocated $50 billion of government TARP money.
The New Obama Refinance Plan has the potential to help millions refinance into affordable, fixed rates, and the plan includes many provisions for the reduction of principal balances for the estimated $11 million households who are under-water on their mortgages.
FHA would be the major backer of the New Obama Refinance Planmortgages, calling into question the viability of such a program as FHA reserves are being stressed with record levels of government-backed mortgage debt.
Here is a summary of some of the proposed highlights of the New Obama Refinance Plan, although many question marks remain and guidelines have NOT been released yet:
1. This program is available for mortgages currently NOT insured by FHA. Current FHA Loans are not eligible.
2. 97.75% loan to value ratio, 115% CLTV. Mortgage debt exceeding 115% will have to be written off by the current servicing lender. AND, if the loan needs less than a 10% principle reduction to hit the 97.75% LTV, IT DOES NOT QUALIFY.
3. Must be CURRENT on their mortgage payments.
4. Minimum credit score of 500.
5. The New Obama Refinance Plan loans must also meet current FHA Guidelines - Full Documentation, full appraisal, etc.
The problem with the New Obama Refinance Plan, as with others in the past such as FHA Secure, is it will involve voluntary lender participation. The government will have to provide some hefty incentives to banks to convince them to write down mortgage balances to the extent of this proposal. FHA Secure only helped a couple thousand people nationwide during the time is was available and was also touted to potentially help millions when the program was announced.
The rhetoric of the New Obama Refinance Plan sounds great, but we have yet to see if this will truly help millions or will instead only help hundreds of households.
More Denver Refinance Information.
See Today's Colorado Mortgage Rates & find out more about getting a Colorado Home Loan
RJ Baxter First Mortgage Corp
Branch Manager
303-670-0137 (direct)
27902 Meadow Drive, Suite 120
Evergreen, Colorado 80439
