HLS update on 105% refi’s without mortgage insurance…

[HLS]

[quote=AN]HLS, let me get this straight, they’re now letting us refi up to 105% LTV? If this rumor becomes reality.[/quote]

AN,, not just yet,,,

This is not a rumor. It is in the works.
It will allow some people to refinance across the country into a lower payment, allowing them to keep their (overpriced stucco box) house.

The exact terms, fees and rates have not been announced yet. Nothing is expected until early April, and it’s subject to change.

Welcome to OBAMAnation where nobody has to accept reality, just keep on pretending because it’s good for the economy.

I am totally against this program, even though I do stand to profit from it.
It will allow people to stay in their homes, even if the home is worth less that what they are financing.

For many people, the lower payment will be cheaper than renting on an after tax basis.
Because they need a place to live, it is the answer for many people.

Even without equity, they have a place to live. I call it renting with a tax deduction, except there is no landlord to call when something breaks.

The govt had to do something, and this program is probably the most intelligent thing that they have done in the last 24 months. It isn’t going to have an up front cost of hundreds of billions of dollars that went in to the hands of criminals and speculators.

Once this program kicks in, Chapter 2 will be kicking it up to 125% LTV. Chapter 3 will be 150% LTV. It will keep some people from walking away if the payments are affordable, regardless of what the house is worth.
For years people have made payments on cars that weren’t worth what they owed. Is there really a difference ? If there was a tax deduction on auto interest, people would drive more expensive cars.
I expect this to happen soon.

I’m against it because it keeps prices artificially high, but that is exactly what the govt wants. It punishes responsible people who have waited to buy.

I’m expecting another refi boom.
We need to wait and see what the rates and terms are, and if there are any gotcha’s… HLS

[an]

[quote=HLS]
I’m expecting another refi boom.
We need to wait and see what the rates and terms are, and if there are any gotcha’s… HLS
[/quote]
I’d totally agree with this and I’d expect the same. I personally would consider taking advantage of it too if the numbers work out in my favor. Why leave my skin in the game if I don’t have to.

[an]

[quote=HLS]
I’m expecting another refi boom.
We need to wait and see what the rates and terms are, and if there are any gotcha’s… HLS
[/quote]
I’d totally agree with this and I’d expect the same. I personally would consider taking advantage of it too if the numbers work out in my favor. Why leave my skin in the game if I don’t have to.

[an]

[quote=HLS]
I’m expecting another refi boom.
We need to wait and see what the rates and terms are, and if there are any gotcha’s… HLS
[/quote]
I’d totally agree with this and I’d expect the same. I personally would consider taking advantage of it too if the numbers work out in my favor. Why leave my skin in the game if I don’t have to.

[an]

[quote=HLS]
I’m expecting another refi boom.
We need to wait and see what the rates and terms are, and if there are any gotcha’s… HLS
[/quote]
I’d totally agree with this and I’d expect the same. I personally would consider taking advantage of it too if the numbers work out in my favor. Why leave my skin in the game if I don’t have to.

[an]

[quote=HLS]
I’m expecting another refi boom.
We need to wait and see what the rates and terms are, and if there are any gotcha’s… HLS
[/quote]
I’d totally agree with this and I’d expect the same. I personally would consider taking advantage of it too if the numbers work out in my favor. Why leave my skin in the game if I don’t have to.

[HLS]

[quote=urbanrealtor]Sheldon,
Has it occurred to you that the programs can be abbreviated “HAR” and “HAM”?

Just sayin’

Dan[/quote]

Urban,, I have already named them HARM and SHAM..
Looking into the face of socialism, something had to be done. I have thought about it and truly believe that if they would done this 12-24 months ago, “we” would would not have thrown trillions of dollars away in bailouts.

They are kicking the can down the road, making future generations responsible for this mess.
The ones that should be screaming the loudest have not been born yet…. HLS

[HLS]

[quote=urbanrealtor]Sheldon,
Has it occurred to you that the programs can be abbreviated “HAR” and “HAM”?

Just sayin’

Dan[/quote]

Urban,, I have already named them HARM and SHAM..
Looking into the face of socialism, something had to be done. I have thought about it and truly believe that if they would done this 12-24 months ago, “we” would would not have thrown trillions of dollars away in bailouts.

They are kicking the can down the road, making future generations responsible for this mess.
The ones that should be screaming the loudest have not been born yet…. HLS

[HLS]

[quote=urbanrealtor]Sheldon,
Has it occurred to you that the programs can be abbreviated “HAR” and “HAM”?

Just sayin’

Dan[/quote]

Urban,, I have already named them HARM and SHAM..
Looking into the face of socialism, something had to be done. I have thought about it and truly believe that if they would done this 12-24 months ago, “we” would would not have thrown trillions of dollars away in bailouts.

They are kicking the can down the road, making future generations responsible for this mess.
The ones that should be screaming the loudest have not been born yet…. HLS

[HLS]

[quote=urbanrealtor]Sheldon,
Has it occurred to you that the programs can be abbreviated “HAR” and “HAM”?

Just sayin’

Dan[/quote]

Urban,, I have already named them HARM and SHAM..
Looking into the face of socialism, something had to be done. I have thought about it and truly believe that if they would done this 12-24 months ago, “we” would would not have thrown trillions of dollars away in bailouts.

They are kicking the can down the road, making future generations responsible for this mess.
The ones that should be screaming the loudest have not been born yet…. HLS

[HLS]

[quote=urbanrealtor]Sheldon,
Has it occurred to you that the programs can be abbreviated “HAR” and “HAM”?

Just sayin’

Dan[/quote]

Urban,, I have already named them HARM and SHAM..
Looking into the face of socialism, something had to be done. I have thought about it and truly believe that if they would done this 12-24 months ago, “we” would would not have thrown trillions of dollars away in bailouts.

They are kicking the can down the road, making future generations responsible for this mess.
The ones that should be screaming the loudest have not been born yet…. HLS

[Anonymous]

[quote=HLS]For many people, the lower payment will be cheaper than renting on an after tax basis.
Because they need a place to live, it is the answer for many people.
[/quote]

This doesn’t add up. They have to refi at the current market price, which means their loan/payment would be the same if someone purchased the house under the same terms (which is what will happen after the foreclosure).

If the new owner then rented it back to the original owner, the rent would be lower than the total payment. The tax deductions are not enough to offset this. We are still nowhere near price/rent ratios that would give immediate positive cash flow to investors.

One of the goals of this plan is to eliminate the transaction costs of the foreclosure/eviction/vacant property/repurchase cycle. Many people that are being foreclosed upon will end up right back in similar properties as renters, but the process of getting there is enormously inefficient and wasteful.

The plan gives homeowners an opportunity to essentially purchase their own house again at market prices and finance it at market interest rates. They can do this without the cost of moving out, trashing their credit, and then attempting to buy again. (Only the middlemen benefit from these costs and it does nothing to benefit the overall economy). If the original purchase was much higher than the current market price, then the homeowner must come up with the difference – not the taxpayer.

The plan is limited to 105% LTV. I think that is probably being too generous, but it does minimize the risk to the taxpayer (and the slippery slope argument about the numbers changing could be made in either direction).

I don’t see this as an attempt to keep prices “artificially high.” Those properties that are hopelessly under water will foreclose as they should. The plan is an attempt to ease the market correction and minimize the transaction costs of a sudden shift in prices. In a free market, the losses should be borne by those who took the risk, and this plan does not do anything that drastically changes this.

Of course the plan is also an attempt to demonstrate that government is taking action instead of being passive. Any elected official from any party would do this, because they would not be in office long if they chose to do nothing in a time of “crisis.” (In other words, the Obama-bashing is a distraction and adds nothing to what could be an otherwise interesting debate).

So part of the motivation for the plan is to create the appearance of decisive leadership. Perhaps it is not optimal, but this is one of the few disadvantages of living in a democracy.

And BTW: many of us are very happy with our stucco boxes.

[Anonymous]

[quote=HLS]For many people, the lower payment will be cheaper than renting on an after tax basis.
Because they need a place to live, it is the answer for many people.
[/quote]

This doesn’t add up. They have to refi at the current market price, which means their loan/payment would be the same if someone purchased the house under the same terms (which is what will happen after the foreclosure).

If the new owner then rented it back to the original owner, the rent would be lower than the total payment. The tax deductions are not enough to offset this. We are still nowhere near price/rent ratios that would give immediate positive cash flow to investors.

One of the goals of this plan is to eliminate the transaction costs of the foreclosure/eviction/vacant property/repurchase cycle. Many people that are being foreclosed upon will end up right back in similar properties as renters, but the process of getting there is enormously inefficient and wasteful.

The plan gives homeowners an opportunity to essentially purchase their own house again at market prices and finance it at market interest rates. They can do this without the cost of moving out, trashing their credit, and then attempting to buy again. (Only the middlemen benefit from these costs and it does nothing to benefit the overall economy). If the original purchase was much higher than the current market price, then the homeowner must come up with the difference – not the taxpayer.

The plan is limited to 105% LTV. I think that is probably being too generous, but it does minimize the risk to the taxpayer (and the slippery slope argument about the numbers changing could be made in either direction).

I don’t see this as an attempt to keep prices “artificially high.” Those properties that are hopelessly under water will foreclose as they should. The plan is an attempt to ease the market correction and minimize the transaction costs of a sudden shift in prices. In a free market, the losses should be borne by those who took the risk, and this plan does not do anything that drastically changes this.

Of course the plan is also an attempt to demonstrate that government is taking action instead of being passive. Any elected official from any party would do this, because they would not be in office long if they chose to do nothing in a time of “crisis.” (In other words, the Obama-bashing is a distraction and adds nothing to what could be an otherwise interesting debate).

So part of the motivation for the plan is to create the appearance of decisive leadership. Perhaps it is not optimal, but this is one of the few disadvantages of living in a democracy.

And BTW: many of us are very happy with our stucco boxes.

[Anonymous]

[quote=HLS]For many people, the lower payment will be cheaper than renting on an after tax basis.
Because they need a place to live, it is the answer for many people.
[/quote]

This doesn’t add up. They have to refi at the current market price, which means their loan/payment would be the same if someone purchased the house under the same terms (which is what will happen after the foreclosure).

If the new owner then rented it back to the original owner, the rent would be lower than the total payment. The tax deductions are not enough to offset this. We are still nowhere near price/rent ratios that would give immediate positive cash flow to investors.

One of the goals of this plan is to eliminate the transaction costs of the foreclosure/eviction/vacant property/repurchase cycle. Many people that are being foreclosed upon will end up right back in similar properties as renters, but the process of getting there is enormously inefficient and wasteful.

The plan gives homeowners an opportunity to essentially purchase their own house again at market prices and finance it at market interest rates. They can do this without the cost of moving out, trashing their credit, and then attempting to buy again. (Only the middlemen benefit from these costs and it does nothing to benefit the overall economy). If the original purchase was much higher than the current market price, then the homeowner must come up with the difference – not the taxpayer.

The plan is limited to 105% LTV. I think that is probably being too generous, but it does minimize the risk to the taxpayer (and the slippery slope argument about the numbers changing could be made in either direction).

I don’t see this as an attempt to keep prices “artificially high.” Those properties that are hopelessly under water will foreclose as they should. The plan is an attempt to ease the market correction and minimize the transaction costs of a sudden shift in prices. In a free market, the losses should be borne by those who took the risk, and this plan does not do anything that drastically changes this.

Of course the plan is also an attempt to demonstrate that government is taking action instead of being passive. Any elected official from any party would do this, because they would not be in office long if they chose to do nothing in a time of “crisis.” (In other words, the Obama-bashing is a distraction and adds nothing to what could be an otherwise interesting debate).

So part of the motivation for the plan is to create the appearance of decisive leadership. Perhaps it is not optimal, but this is one of the few disadvantages of living in a democracy.

And BTW: many of us are very happy with our stucco boxes.

[Anonymous]

[quote=HLS]For many people, the lower payment will be cheaper than renting on an after tax basis.
Because they need a place to live, it is the answer for many people.
[/quote]

This doesn’t add up. They have to refi at the current market price, which means their loan/payment would be the same if someone purchased the house under the same terms (which is what will happen after the foreclosure).

If the new owner then rented it back to the original owner, the rent would be lower than the total payment. The tax deductions are not enough to offset this. We are still nowhere near price/rent ratios that would give immediate positive cash flow to investors.

One of the goals of this plan is to eliminate the transaction costs of the foreclosure/eviction/vacant property/repurchase cycle. Many people that are being foreclosed upon will end up right back in similar properties as renters, but the process of getting there is enormously inefficient and wasteful.

The plan gives homeowners an opportunity to essentially purchase their own house again at market prices and finance it at market interest rates. They can do this without the cost of moving out, trashing their credit, and then attempting to buy again. (Only the middlemen benefit from these costs and it does nothing to benefit the overall economy). If the original purchase was much higher than the current market price, then the homeowner must come up with the difference – not the taxpayer.

The plan is limited to 105% LTV. I think that is probably being too generous, but it does minimize the risk to the taxpayer (and the slippery slope argument about the numbers changing could be made in either direction).

I don’t see this as an attempt to keep prices “artificially high.” Those properties that are hopelessly under water will foreclose as they should. The plan is an attempt to ease the market correction and minimize the transaction costs of a sudden shift in prices. In a free market, the losses should be borne by those who took the risk, and this plan does not do anything that drastically changes this.

Of course the plan is also an attempt to demonstrate that government is taking action instead of being passive. Any elected official from any party would do this, because they would not be in office long if they chose to do nothing in a time of “crisis.” (In other words, the Obama-bashing is a distraction and adds nothing to what could be an otherwise interesting debate).

So part of the motivation for the plan is to create the appearance of decisive leadership. Perhaps it is not optimal, but this is one of the few disadvantages of living in a democracy.

And BTW: many of us are very happy with our stucco boxes.

[Author]

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