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Democratic Home Mortgage Bill:

Posted on: 09th May, 2008 04:00 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 billion 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.
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.
Posted on: 09th May, 2008 04:31 am
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!
Posted on: 09th May, 2008 06:20 am
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.
Posted on: 10th May, 2008 03:32 am
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.
Posted on: 10th May, 2008 04:35 am
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.
Posted on: 10th May, 2008 12:02 pm
several good posts and I agree that it may spike another refinance boom...
Posted on: 10th May, 2008 02:39 pm
To pull the nation from the housing problem a key Senate committee has offered a new mortgage bail out plan. Instead of the taxpayers government sponsored Fannie Mae and Freddie Mac will provide home loan rescue for up to 500,000 delinquent homeowners. The Bill will tighten the regulations of Fannie Mae and Freddie Mac which will finance a new affordable housing fund to pay the foreclosure prevention fund. This housing bill is yet to be final. The law makers are on a week long break. After their return the Bill will have to go through a continuous and complicated round of House-Senate negotiations and then it will be presented to President Bush.
Posted on: 22nd May, 2008 04:24 am
Right I saw that two and the president is already saying that he likes this bill more than the house bill. Also, did you notice the number is still the same $300 billion. In addition, there are alot of voters out there who lost thier jobs and homes and they are bothering thier local represenatives to get this done before the November election or else.
Posted on: 22nd May, 2008 06:47 pm
The Congress has approved the Hope for Homeowners Act under which, those who qualify can replace their old mortgages into 30 year fixed rate loans for up to 90% of the current home value.

However, whether a loan will be replaced by a 30 year FRM will depend upon the lender or the bank involved. After all, the bank should be prepared to face the loss on the existing loans in place of a foreclosure which is often costly.

In order to qualify for this rescue plan, a borrower needs to satisfy the criteria as given below:
  1. One must have spent 31% of his monthly income on mortgage payment as of march 1, 2008
  2. The loan must have been offered no later than Jan1, 2008
  3. The loan must be secured by the borrower's primary residence
  4. The borrower's income must have been verified
Posted on: 30th Jul, 2008 05:13 am
I tried to qualify but couldn't. I was told my credit score is not good enough and the lenders/banks still require certain credit score. They have the "CHOICE" whether to participate or not. They are not mandated by the government. So most of them decline anyway. Good for the ones who qualify. Another things is if you sell your house within a year, the goverment gets all the equity benefits then it goes down and down until after five years, you are still sharing 50% of the profit with the government.
Posted on: 13th Nov, 2008 05:15 pm
it is the wrong thing to do for all the right reasons.
Posted on: 08th Aug, 2010 05:54 pm
Thanks a lot :-) start work now. See some direction already. thanks for the advise.

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Posted on: 20th Aug, 2010 02:50 am
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