Some actual language from the stimulus bill

[DWCAP]

Breeze,

I am no expert in this. I really have no experience in this, so I can just tell you my opinion. The point of this bill isnt to refi bad morgages from the bubble and put the added risk on the american taxpayer. The point of this is three fold.

1) This is about the apperarence of doing something, this is an election year, and the pols need to be infront of the talking heads telling everyone that they got this one as much as possible.

2) Spurring demand. The idea is that there are alot of people who want to buy, but think price drops are still out there (they are correct) and dont want to catch falling meat cleavers. This is the cattle prod to get them off the fence and buy now, “before they miss the future appreciation.” Remember, CA is expected to see a “mini-boom” according to the NAR as soon as this passes.

3) It is convient that this time line starts at the bursting of the bubble. The worst loans were written in late 2006 early 2007, so dont count. The rest of the truly horrible morgages dont qualify on the basis of income, LTV, etc. This will lower the default rate on the morgages actually purchased by the GSE’s, giving them ammo to make these prices longer term. You didnt think they would actally let the conforming limits fall back to 417000 again did you?

The NAR couldnt get this past congress, unless it is a stimulus to an ailing economy in an election year. However once it is inplace, it is alot easier to “keep the status quo” or “not do anything to hurt the US economy”. And if they get to help the ailing banks and wall streeters by takeing morgages they shouldnt be, that is just improving liquidity right? no harm done…..

[SHILOH]

“Sure, now is a great time to refinance – that is, if you can still qualify. Here is what lenders are looking for…” By Les Christie, CNNMoney.com 2/8/08
http://money.cnn.com/2008/02/08/real_estate/who_can_refi/index.htm

Elsewhere I read that the economic stimulus pkg would only impact about 120K subprime borrowers:
“Our updated analysis shows the Treasury Department’s plan involving streamlined loan modifications will prevent only 118,200 foreclosures—about 3% of the outstanding subprime mortgages with adjustable interest rates that are causing the current market turmoil. The Treasury plan, plus existing lender modifications, will barely make a dent in the growing foreclosure crisis and will allow subprime damage to continue spreading through the entire economy.”
http://www.responsiblelending.org/issues/mortgage/research/updated-analysis-of-paulson-plan.html

Many of the borrowers also did helocs and since the house is depreciating..and their credit is shot…plus they don’t have the income..all spells no refinance. “…the make or break metric is home equity.”

Can Fannie Mae realistically get the resources to buy up these bad debts and refinance these?

[SHILOH]

“Sure, now is a great time to refinance – that is, if you can still qualify. Here is what lenders are looking for…” By Les Christie, CNNMoney.com 2/8/08
http://money.cnn.com/2008/02/08/real_estate/who_can_refi/index.htm

Elsewhere I read that the economic stimulus pkg would only impact about 120K subprime borrowers:
“Our updated analysis shows the Treasury Department’s plan involving streamlined loan modifications will prevent only 118,200 foreclosures—about 3% of the outstanding subprime mortgages with adjustable interest rates that are causing the current market turmoil. The Treasury plan, plus existing lender modifications, will barely make a dent in the growing foreclosure crisis and will allow subprime damage to continue spreading through the entire economy.”
http://www.responsiblelending.org/issues/mortgage/research/updated-analysis-of-paulson-plan.html

Many of the borrowers also did helocs and since the house is depreciating..and their credit is shot…plus they don’t have the income..all spells no refinance. “…the make or break metric is home equity.”

Can Fannie Mae realistically get the resources to buy up these bad debts and refinance these?

[SHILOH]

“Sure, now is a great time to refinance – that is, if you can still qualify. Here is what lenders are looking for…” By Les Christie, CNNMoney.com 2/8/08
http://money.cnn.com/2008/02/08/real_estate/who_can_refi/index.htm

Elsewhere I read that the economic stimulus pkg would only impact about 120K subprime borrowers:
“Our updated analysis shows the Treasury Department’s plan involving streamlined loan modifications will prevent only 118,200 foreclosures—about 3% of the outstanding subprime mortgages with adjustable interest rates that are causing the current market turmoil. The Treasury plan, plus existing lender modifications, will barely make a dent in the growing foreclosure crisis and will allow subprime damage to continue spreading through the entire economy.”
http://www.responsiblelending.org/issues/mortgage/research/updated-analysis-of-paulson-plan.html

Many of the borrowers also did helocs and since the house is depreciating..and their credit is shot…plus they don’t have the income..all spells no refinance. “…the make or break metric is home equity.”

Can Fannie Mae realistically get the resources to buy up these bad debts and refinance these?

[SHILOH]

“Sure, now is a great time to refinance – that is, if you can still qualify. Here is what lenders are looking for…” By Les Christie, CNNMoney.com 2/8/08
http://money.cnn.com/2008/02/08/real_estate/who_can_refi/index.htm

Elsewhere I read that the economic stimulus pkg would only impact about 120K subprime borrowers:
“Our updated analysis shows the Treasury Department’s plan involving streamlined loan modifications will prevent only 118,200 foreclosures—about 3% of the outstanding subprime mortgages with adjustable interest rates that are causing the current market turmoil. The Treasury plan, plus existing lender modifications, will barely make a dent in the growing foreclosure crisis and will allow subprime damage to continue spreading through the entire economy.”
http://www.responsiblelending.org/issues/mortgage/research/updated-analysis-of-paulson-plan.html

Many of the borrowers also did helocs and since the house is depreciating..and their credit is shot…plus they don’t have the income..all spells no refinance. “…the make or break metric is home equity.”

Can Fannie Mae realistically get the resources to buy up these bad debts and refinance these?

[SHILOH]

“Sure, now is a great time to refinance – that is, if you can still qualify. Here is what lenders are looking for…” By Les Christie, CNNMoney.com 2/8/08
http://money.cnn.com/2008/02/08/real_estate/who_can_refi/index.htm

Elsewhere I read that the economic stimulus pkg would only impact about 120K subprime borrowers:
“Our updated analysis shows the Treasury Department’s plan involving streamlined loan modifications will prevent only 118,200 foreclosures—about 3% of the outstanding subprime mortgages with adjustable interest rates that are causing the current market turmoil. The Treasury plan, plus existing lender modifications, will barely make a dent in the growing foreclosure crisis and will allow subprime damage to continue spreading through the entire economy.”
http://www.responsiblelending.org/issues/mortgage/research/updated-analysis-of-paulson-plan.html

Many of the borrowers also did helocs and since the house is depreciating..and their credit is shot…plus they don’t have the income..all spells no refinance. “…the make or break metric is home equity.”

Can Fannie Mae realistically get the resources to buy up these bad debts and refinance these?

[SHILOH]

“Mortgages originated during the period beginning on July 1, 2007, and ending at the end of December 31, 2008.

Calculation of New Conforming Loan Limit. The limitation on the maximum original principal obligation of a mortgage that may be purchased by the GSEs shall be the higher of:

(1) the conforming loan limitation for 2008

(2) 125 percent of the area median home price, but in no case to exceed 175 percent of the conforming loan limitation for 2008″
http://www.mikesrealestateshow.com/2008/01/29/new-conforming-loan-limits-you-just-got-125-off-your-interest-rate-for-new-loan/

When is a mortgage considered “original.” If you refi does that then make the new mortgage an “original.” It would seem that original would only apply to the borrowers first mortgage on the property….

[SHILOH]

“Mortgages originated during the period beginning on July 1, 2007, and ending at the end of December 31, 2008.

Calculation of New Conforming Loan Limit. The limitation on the maximum original principal obligation of a mortgage that may be purchased by the GSEs shall be the higher of:

(1) the conforming loan limitation for 2008

(2) 125 percent of the area median home price, but in no case to exceed 175 percent of the conforming loan limitation for 2008″
http://www.mikesrealestateshow.com/2008/01/29/new-conforming-loan-limits-you-just-got-125-off-your-interest-rate-for-new-loan/

When is a mortgage considered “original.” If you refi does that then make the new mortgage an “original.” It would seem that original would only apply to the borrowers first mortgage on the property….

[SHILOH]

“Mortgages originated during the period beginning on July 1, 2007, and ending at the end of December 31, 2008.

Calculation of New Conforming Loan Limit. The limitation on the maximum original principal obligation of a mortgage that may be purchased by the GSEs shall be the higher of:

(1) the conforming loan limitation for 2008

(2) 125 percent of the area median home price, but in no case to exceed 175 percent of the conforming loan limitation for 2008″
http://www.mikesrealestateshow.com/2008/01/29/new-conforming-loan-limits-you-just-got-125-off-your-interest-rate-for-new-loan/

When is a mortgage considered “original.” If you refi does that then make the new mortgage an “original.” It would seem that original would only apply to the borrowers first mortgage on the property….

[SHILOH]

“Mortgages originated during the period beginning on July 1, 2007, and ending at the end of December 31, 2008.

Calculation of New Conforming Loan Limit. The limitation on the maximum original principal obligation of a mortgage that may be purchased by the GSEs shall be the higher of:

(1) the conforming loan limitation for 2008

(2) 125 percent of the area median home price, but in no case to exceed 175 percent of the conforming loan limitation for 2008″
http://www.mikesrealestateshow.com/2008/01/29/new-conforming-loan-limits-you-just-got-125-off-your-interest-rate-for-new-loan/

When is a mortgage considered “original.” If you refi does that then make the new mortgage an “original.” It would seem that original would only apply to the borrowers first mortgage on the property….

[SHILOH]

“Mortgages originated during the period beginning on July 1, 2007, and ending at the end of December 31, 2008.

Calculation of New Conforming Loan Limit. The limitation on the maximum original principal obligation of a mortgage that may be purchased by the GSEs shall be the higher of:

(1) the conforming loan limitation for 2008

(2) 125 percent of the area median home price, but in no case to exceed 175 percent of the conforming loan limitation for 2008″
http://www.mikesrealestateshow.com/2008/01/29/new-conforming-loan-limits-you-just-got-125-off-your-interest-rate-for-new-loan/

When is a mortgage considered “original.” If you refi does that then make the new mortgage an “original.” It would seem that original would only apply to the borrowers first mortgage on the property….

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