Hope for Home Refinancing Returning
ByLots of homeowners are frustrated because that they can’t qualify for mortgage refinancing even though home loan rates are at all-time lows. Rachel Beck reported in a Reuters article that these homeowners are not by themselves as many people on Wall Street are rooting for lenders to loosen the refinance guidelines because they believe that refinance boom would be an effective way to boost the economy. Their train of thought is that if more homeowners can take advantage of home refinancing, that they will have more disposable income to help spend us out of this recession.
Those economists and analysts calling for a mass mortgage reset say it could be engineered by the government, which controls the giant mortgage lenders Fannie Mae and Freddie Mac. Have them loosen underwriting criteria and offer discounted lender fees in an effort to help the distressed homeowners qualify for a fixed refinance loan that could boost their quality of life with an immediate increased cash flow..
The only way, the trend of mortgage refinancing in high volumes nationally would indicate that banks and lenders were reverting to looser refinance guidelines, one of the things that got us into this mess. It could also boost mortgage refinance rates for new borrowers and force U.S. taxpayers to shoulder more risk, since they technically own Fannie and Freddie. Dean Baker, co-director of the left-leaning Center for Economic and Policy Research in Washington said, “At some point, we have to ask ourselves how much more can we ask taxpayers to do to support people staying in their homes.”
Wall Street has been buzzing with talk of additional mortgage relief. HUD announced a new FHA short-refinance program that will offer mortgage aid to borrowers who saw their property value tank in the last few years. Apparently, GMAC has been offering these FHA short refi’s to distressed homeowners residing in California. Millions of borrowers haven’t been able to qualify for fixed rate mortgage refinancing. Many of these homeowners have been rejected multiple times by multiple lending companies. Unfortunately, missing out on these record low mortgage refinance rates, is like leaving thousands of dollars on the table.
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