Under the new Homeowner Affordability and Stability Plan, homeowners who stay current on their mortgages, but have been unable to refinance because of decreasing home values, are eligible to refinance into a low-interest, 15 yr or 30 yr fixed rate loan!
The new initiatives can also be used to replace Adjustable Rate Mortgages or Interest Only Loans.
These programs can help homeowners who have loan-to-values ( LTVs ) above 80%, but not more than 105%. If you have a 2nd mortgage or equity line of credit there is no combined LTV limit, provided your 2nd mortgage holder agrees to subordinate their lein.
Step One – visit Fannie and Freddie’s websites below to see who has your current loan.
Step Two – Call or email and we’ll see if you qualify. Easy stuff!
In its quarterly survey to member banks, the Federal Reserve asked senior bank loan officers whether “prime” residential mortgage guidelines had tightened in the last 3 months.
Nearly 50% of banks said guidelines tightened last quarter, a much lower figure than during all of 2008 and a signal mortgage lending may be turning a corner.
Guidelines remain restrictive, however.
Versus 18 months ago, lenders subject would be borrowers to all of the following:
- Higher minimum credit score thresholds
- Larger minimum downpayments
- Lower debt-to-income requirements
- Mandatory fees based on certain loan traits
In addition, the availability of subordinate financing has all but disappeared when a home’s loan-to-value exceeds 80 percent.
Combined, these changes preclude a lot of Americans from getting access to today’s low rates but that could change in the coming months if the Fed’s reported trend continues.
Some experts believe credit tightening started the recession. Credit loosening, therefore, could help lead us out.