Democratic Home Mortgage Bill:

Shared by Larry on Fri May 09, 2008 4:00 am
On Thursday the House of Representative passed the Home Mortgage Bill to provide limited relief to the defaulted homeowners. The main provision of this bill is that FHA will guarantee up to $300 in refinanced home loan. Homeowner who have taken sub-prime mortgage and ARM but still shows now the ability to pay the refinanced loan will have reduced principal and converted their mortgage to 30 year FRM. This will help them to reduce monthly mortgage payments and avoid foreclosure. Source: http://www.wsws.org/articles/2008/may2008/hous-m09.shtml

Community Members Opinion

Niicss

Niicss

Joined: 03 Oct 2005
Posts: 662

94.17 Dollars($)

Posted: Fri May 09, 2008 4:31 am Post subject:

Wow this is a Very good news Larry Especially for the borrowers who are facing difficulties because of the rate adjustment. The best thing of this bill is that principal balance of the mortgage can be reduced if the property value less than the amount the borrower owe to the bank. Hope this bill will help the borrowers and the economy get out from the vicious circle of credit crunch. _________________ Good is the Enemy of Great.

cliff

Joined: 05 May 2008
Posts: 62
Location: Houston

19.53 Dollars($)

Posted: Fri May 09, 2008 6:20 am Post subject:

Great Bill! However, it will face some head winds as it moves through the senate. For all you mortgage people $300 billion will be great for business in this new nitch market. Great post larry! _________________ Cliff Pape Market Analyst www.home-buddies.com

Jessica
Mortgage Mentor
Jessica

Joined: 08 Jun 2004
Posts: 613
Location: OHIO

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Posted: Sat May 10, 2008 3:32 am Post subject:

So, we have yet another bill for distressed homeowners. And if I am to believe statistics, it's going to help only 8.6% of the millions of borrowers in foreclosure. Anyway, what it states is, anyone having a sub-prime loan or an ARM and demonstrating the ability to pay off a refinance loan will be able to reduce their principal loan amount so that they can at least pay off their loans. The bill as they say is likely to provide relief to 1.5-2 million people in the next 5 years. But with 1.5 million families already facing foreclosure and another 2.8 million likely to go through it, I doubt as to how much this bill can help financially stressed-out borrowers. Regards, Jessica. _________________ Home buying made simple with Community booklet

jenkin7

Joined: 04 Jun 2007
Posts: 880

131.00 Dollars($)

Posted: Sat May 10, 2008 4:35 am Post subject:

Hi Larry. I doubt whether it is a good news or not because Mr. President would veto this bill and rightly so because Most people who are facing the foreclosure are irresponsible borrowers who have taken the ARM without anglicizing their situation properly and even do not bother to consult with the bank when they faces problem with their payments. So those irresponsible borrowers should face the music.

cliff

Joined: 05 May 2008
Posts: 62
Location: Houston

19.53 Dollars($)

Posted: Sat May 10, 2008 12:02 pm Post subject:

Of course as always with any government action it is always going to be too little to late for the majority of people it is trying to help. So what should you do as a mortgage professional? You have to understand the economic impact and adapt to utilize it to your advantage in helping your current clients. As an economist, here are my thoughts on how it will affect mortgage markets and ultimately the mortgage industry. Ok here we go. When looking at government intervention (i.e. pumping money into any market(s)) you have to look out at least six months to a year in the future. This is because it takes markets that long to respond to economic stimulus, and no matter what you think about H.R. 5830 http://www.govtrack.us/data/us/bills.text/110/h/h5830.pdf its affect will be an economic stimulus to the economy. So what does this mean to mortgage professionals? This means over the next year you need to focus on your potential refinance clients. So the same people who did cash out refies will be back in season again! Jessica is right; the majority of people who need this will not be the people who utilize it. It will be the people who refinanced during the lending boom who are not currently in trouble but would like to take advantage of the new FHA program. So you want to start today to let them know that once this bill passes they will be able to refinance into a mortgage that is 90% of the appraised value of their home. Simply put, we are now headed for another refinance boom and, just like the last one, it will all start with government policy! Side note on politics: no worries even if this bill does not pass, some type of bill similar to it will. The political pressure is up and constituents are insisting on their representatives to pass some type of bill to counter act the terrible mess we’re in. _________________ Cliff Pape Market Analyst www.home-buddies.com

Guest

0.10 Dollars($)

Posted: Sat May 10, 2008 2:39 pm Post subject:

several good posts and I agree that it may spike another refinance boom... _________________ Need help choosing the right loan? Get free consultation from community lenders/consultant


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