Coop..
You got it ,,, many people just don’t qualify by historical lending guidelines….
The new “conforming jumbos” require minimum 25% down/equity.
The rates are currently .50% higher than conforming, but with a lower debt ratio, and full doc only.
Today, 30 YR fixed “conforming jumbo” would be 6.375% with less than a 1pt cost or 6.25% with a 1.20% cost.
With only 20% equity, the “old” jumbo rate is 7.375%, so the GSE rates are lower, it’s just all about qualifying!
The govt’s attempt is to delay, prolong, stall and spread out the inevitable. By giving people false hope and encourage modifications it does exactly that and avoids widespread panic at collapse all at once.
It is a fact that a high % of mod’s end up in default anyway. More people will lose houses or just be upside down in debt claiming to be “homeowners” for many years to come and in actuality own absolutely nothing.
The govt can TRY to control many things, but the true value of the house isn’t one of them.
They are well aware of the continuing crisis that this represents, and just want to pass it off to the next administration, who will not have any better idea of what to do…
I’m still trying to decide which sounds better, Clintonvilles, Obamavilles or McCainvilles…
