Another lukewarm attempt to help stabilize the housing market won’t do much.
MORTGAGE, EXPERT, MICHIGAN, BIRMINGHAM, BLOOMFIELD, DETROIT, ROCHESTER, ROYAL OAK, TROY
Yesterday, Edward DeMarco with the Federal Housing Finance Agency announced that the program that allows homeowners to refinance their upside down homes would be extended.
Big deal.
When Obama announced the program, it was touted to be able to help 4-5 million homeowners refinance into lower rates and therefore be less likely to walk-away from their homes.
Initially, the program allowed homeowners to refinance up to 105% of their home’s current value.
After dismal response, the program was expanded to allow refinances up to 125%.
Apparantly those in the White House consulting the President on this program are clueless to what happens in the real world.
Soon after the 125% expansion was announced, FNMA announced they would charge a lot more for the program.
Also, there are severe problems with homeowners who have PMI or second loans (or lines of credit) on their homes. Trying to get a PMI company to reissue a new PMI certificate of getting a lender to resubordinate their second lien is a time consuming nightmare.
On top of that, in many hard hit states where upsde down homeowners could be helped the most, many homeowners owe more than 125% of their homes current value.
Come on President Obama, let’s see you step up and really do something to help upside down homeowners.