Housing Insiders Weigh In On Sacramento Real Estate Refinancing

Housing Insiders Weigh In
On Sacramento Real
Estate Refinancing

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Housing Insiders Weigh In On
Sacramento Real Estate Refinancing
Sacramento Real estate investors and wannabes, industry
experts and politicians throughout the region expressed
relief when the Obama administration announced major
changes to a federal program that could help more
homeowners who are having problems on their real estate
mortgage.


The Obama administration believes that these changes
would have a great positive effect in the industry once it is
implemented.

But most of the real estate experts have agreed to remain
silent not until they see that the administration would
really pursue on the said program.


They remain quite since lender participation in the
program is voluntary and implementation could depend
on the situation.

According to a real estate expert in Sacramento, “The
changes will affect the Home Affordable Refinance
Program, which aims to help certain borrowers refinance
their home loans and reap the benefits of historically low
mortgage rates.”


The program, as of August, has helped almost 5,000
people refinance their mortgages and lower their monthly
payments.

The Obama administration estimates it could double that
number with the new adjustments, an authorized person
said.


To give you a better idea, the government’s shifts include:

Encouraging people to refinance into home loans with
shorter terms by nixing certain fees.


They would also take away the 125 percent loan-to-value
cap for fixed-rate home loans, something that kept many
borrowers from taking advantage of the program.

The Obama administration would also get rid of new
appraisals and instead using what government officials
call "automated valuations models."


But the question is will this work to everyone?

According to some experts, they doubted this so called
refinancing. "I doubt it will have a large effect
nationwide," said a director of real estate center at San
Diego State University. "And the question remains as to
how banks will implement."


Government enterprises Freddie Mac and Fannie
Mae, who were part of Monday's announcement, will
unroll more exact details on the changes by Nov. 15.
Lenders are not required to take part in the program.

"Implementation schedules will vary as individual
lenders, mortgage insurers and other market participants
modify their processes," the FAQ says.


Another real estate practitioner added that the said
refinancing program could help qualified borrowers lower
their mortgage payments, which may bode well for the
U.S. economy.

But on the other hand, he continued that the changes
don't address "the main problem of negative equity" and
that refinancing could cost investors a huge amount of
dollars.


"Investors see refinance as a prepayment creating a loss
relative to what they assumed they would earn when they
invested in the mortgage (i.e., their investment at 5
percent is now one at 3.5 percent," and this would be a
real problem for investors who would just like to earn
from investing their hard earned money through buying
and selling multiple properties below market value.


Meanwhile, an analyst at Bankrate.com, called the
changes "long overdue," and "better late than never" this
analyst believe that this changes would benefit the real
estate industry in a very positive way.


Meanwhile, according to some experts, “Bank of America
will participate in the enhanced Home Affordable
Refinance Program announced by the Administration in
the coming days and which is expected to go into effect
December 1.

Since the inception of HARP in 2009, Bank of America has
helped many homeowners through this program; more
than any other lender.


Despite ongoing economic challenges, nearly 90 percent
of our customers remain current on their mortgage.

HARP helps these homeowners who remain current on
their mortgage with options to lower their monthly
payment when, otherwise, conventional funding options
are limited.”


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