The News Review:
- Hope for Homeowners program appears dashed
- Expanded loan limits for home buyers to end Dec. 31
- Banks profit as mortgage gap hits historic high
- Tri-City mortgage market grows with FHA-backed loans
Hope for Homeowners program appears dashed
Baltimore Sun, United States
The Bush administration is also reportedly considering a proposal by the mortgage industry to split loan losses with the government, costing taxpayers about $50 billion. White House and Treasury officials didn’t respond to requests for comment. For lenders who originated the troubled loans, and the investors in mortgage securities who now own most of them, a major downside to the Hope for Homeowners program is that they must record a big loss on each loan refinanced through the program. For a borrower to participate, the owner of the existing loan – usually investors in mortgage-backed securities – must agree to accept as repayment the proceeds of the borrower’s replacement loan, which isn’t to exceed 90 percent of the value of the home. But sharp declines in home prices have left many recent home buyers owing much more than their properties are worth, meaning lenders would have to forsake a substantial portion of what they are owed. The program also requires the borrower to pay an upfront FHA insurance premium of 3 percent. Because the applicants are unlikely to have any other way to pay that fee, they would have to borrow it as part of the new loan – essentially capping the refinanced loan at just 87 percent of the home’s value.
Related from Insurancemonster: Help for Homeowners, at Last?
Expanded loan limits for home buyers to end Dec. 31
San Jose Mercury News, USA
place_ad_here(“adPosBox”); made under the old guidelines funded and closed by year’s end. “Most lenders are discontinuing those by Dec. 15,” said Rob McCarthy, owner of mortgage brokerage the Honte Group in Campbell. He said the reduced loan limit might affect the refinancing or purchase plans of hundreds of his clients, whom he’s been e-mailing lately to get the word out. Time will be short for some customers. For Wells Fargo loans made through mortgage brokers, for example, brokers must lock in rates for “high-balance conforming loans” by Nov. 17 and close the transactions by Dec.
Banks profit as mortgage gap hits historic high
Telegraph.co.uk, United Kingdom
But we would expect some lenders to start offering rates at below 5pc next week, and these rates could go lower, if the Bank of England does reduce interest rates again. This means that for many looking to refinance their mortgage, a fixed rate might prove to be the cheapest option. Not only does it offer a lower payrate to begin with, it also offers security as homeowners know they are protected, in the short term at least, from future rate rises. Of course, the advantage of a tracker is that borrowers will benefit from future rate cuts. However, with more of these new deals expected to have “collars” attached, this may no longer be the case and the only direction that rates could move in future is upwards. grab a decent savings rate while you canRate cuts are usually good news for borrowers, but bad news for savers.
Tri-City mortgage market grows with FHA-backed loans
Mid Columbia Tri City Herald, WA
8 percent during the first half of the year, compared with 5. 7 percent in the second half of 2007. That’s the kind of loan Mike Martin of Richland was looking for when he wanted to refinance out of an adjustable-rate mortgage. He wasn’t quite sure how rates would act, but said he wanted to refinance before the new federal administration takes office. “I was listening to what’s going on nationally and watching what’s going on with the mortgage industry. “I was on pins and needles waiting for (Runsvold) to tell me I’d received approval.