In case you missed it, the so called, 2 month payroll tax cut is going to be paid for by: It will be funded by 30 years of increased lending fees on Fannie Mae, Freddie Mac, FHFA and other federal loans.
factoring in other facets of a borrower’s finances. For example, " if the person might be able to pay it back" This type of lending, truly, sounds like something government would come up with, for sure.
Fannie Mae Loan?
Fannie Mae Loan?
Ability to Repay?Attempting to make the Home Affordable Refinance Program (HARP) more accessible the "second" time, government-controlled GSE, in it's infinite wisdom, is no longer requiring borrowers to demonstrate that they can payback their home loans in order to refinance. This pesky detail was removed from the borrower-vetting criteria because lenders have argued that it is preventing them from refinancing loans through the HARP program. The lenders have been refusing refinance options because “the lack of clarity on what ‘reasonable ability’ precisely means could expose [them] to indemnification liability in the event that the loan defaults.” The removal of the clause will allow lenders to look more narrowly at the amount owed and the number of payments to be made rather than
However, these" wonderful "changes to HARP may not be good news for everyone. Bank of America, for one responded to the changes by affirming “strong support” for HARP, bank investors, on the other hand, could suffer because the prepayments triggered by refinancing can put a dent in returns on investments. And no one is talking about the problems that are going to kick in when we find out many of these people can't repay. But better to refinance then go into foreclosure, right?
The Federal Housing Finance Agency (FHFA) projects that the number of participants refinancing through HARP could double in the next year alone thanks to the changes in qualification standards. Who wouldn't want to refinance if they aren't even going to make sure you can pay.
CAN YOU SAY KICK THE CAN DOWN THE ROAD? I ask you,
what are these idiots in Washington thinking? Oh wait, they aren't
thinking, not sure they know how?
I had a better idea from the "get-go," instead of wasting all of the TARP money they should have paid off every home loan under $200,000 or so. The owners of those homes would be true owners, they would have received a pay raise of the amount of their loan ( each month), the banks would be paid off, people would be buying all kinds of "stuff", life would be better for a heck of a lot more people.