Thomas Crate, CA DRE #01470571, NMLS #332624

Bank of America will halt originations of cash-out refinancings, citing what it calls a capacity problem. Source: National Mortgage News

Borrowers who are current on their home loans may be able to refinance for lower interest rates, even if they are seriously upside down. The Federal Housing Finance Agency (FHFA) announced today that it will broaden the scope of the Home Affordable Refinance Program (HARP) by removing the current 125 percent loan-to-value cap for fixed-rate mortgages backed by Fannie Mae and Freddie Mac. Other program enhancements include, among other things, reducing certain fees, eliminating the need for a new property appraisal if the FHFA has a reliable automated valuation model (AVM) estimate, and extending HARP until the end of 2013. New federal guidelines for the HARP changes should be released to mortgage lenders and servicers by November 15. The basic eligibility requirements for an enhanced HARP loan are as follows: • Existing mortgage loan must be owned or guaranteed by Fannie Mae or Freddie Mac. • Existing mortgage loan must have been sold to Fannie Mae or Freddie Mac before June 1, 2009. • Existing mortgage loan cannot have been refinanced under HARP previously (except for Fannie Mae loans refinanced between March and May 2009). • Current loan-to-value (LTV) ratio must be more than 80%. • Existing mortgage loan must be current, with no late payments in the past six months, and no more than one late payment in the past 12 months.

Friday, October 21, 2011 The Senate late Thursday approved an amendment to restore the $729,750 maximum loan limit on government-back mortgages for two more years. Sponsored by Senators Robert Menendez, D-N.J. and Johnny Isakson, R-Ga., the measure rolls back the October 1 reductions in Fannie Mae, Freddie Mac and FHA/VA loan limits in high cost areas. The expiration of the higher loan limit has "made a weak housing market even weaker,” said Sen. Menendez during the Senate debate. “If we don't get that weak housing market moving again, we won't get the kind of robust economic recovery that Americans deserve.” The Menendez-Isakson amendment also restores the FHA loan limit to 125% of the median house price in low cost areas. It was reduced to 115% on October 1. The Senate approved the loan limit amendment by a 60-38 vote. It now moves to the House. It took a minimum of 60 votes under Senate rules to approve and attach the amendment to a Department of Housing and Urban Development appropriations bill. The National Association of Realtors lobbied heavily to get the necessary votes, officials said. To cover possible losses on higher balance Fannie/Freddie mortgages, the amendment imposes an annual 15 basis point fee on “jumbo GSE” loans. Source: National Mortgage News