With this program, you can only refi an existing 1st mortgage. If there is a 2nd they must agree to a subordination. It’s not intended to be a gift to holders of 2nds. If you currently have mtg insurance it remains.
Perhaps having a 125% loan at a lower interest rate decreases the risk to FNMA a tiny bit, but I’d say that the ice cream is now melting in 80 degree weather instead of 100 degree weather. It’s still melting.
The true fix is accelerated, forcible foreclosures.
A very painful solution, but one that will restore the credibility of the entire system and bring people’s attitudes about money and values back down to earth.
Until then it’s a wishful game of musical chairs….HLS
