Posted by GOLDGIRL/CA on 5/14/12 9:11pm
Msg #420836

Interesting proposed legislation


From DSNews.com:


At a time when mortgage rates have hit record-low numbers, HUD Secretary Shaun Donovan stressed urgency in passing housing refinance bills on President Barack Obama’s “to-do” list for Congress.

During a teleconference Friday, which preceded Obama’s stop into Reno, Nevada, to boost support for the housing proposals, Donovan outlined the three bills, which he said were introduced to Congress that week.

The first bill, sponsored by Barbara Boxer (D-California) and Robert Menendez (D-New Jersey), looks to reduce the cost for refinancing, increase servicer competition, and streamline the refinancing process. (Me: Yea, that'll be the day!) The bill would also allow borrowers with a second lien or home equity line of credit to refinance.

The second bill, introduced by Diane Feinstein (D-California), proposes to expand eligibility for refinancing to non-GSE backed loans.

Donovan said there are about 3.5 million families who are doing the right thing, paying their bills, but have been locked out of refinancing because they have a private label security loan.

The third bill looks to rebuild equity into homes of underwater borrowers. Introduced by Jeff Merkley (D-Oregon), the bill would allow borrowers to refinance into shorter terms with lower interest rates and apply their savings to reduce their mortgage balance.

Donovan said the bills would save homeowners an average of $2,500 to $3,000 a year, and overall, will help families, the economy, and even taxpayers by preventing GSE-backed mortgages from defaulting.

Reply by desktopfull on 5/14/12 11:28pm
Msg #420849

Is this so the government can get the majority of that $2500 to $3000 dollars savings paid to them for MIP insurance for 10 years+. Did a refi closing the other day and it had a 3.75% interest rate, but the savings on the payment quickly went away when you looked at the $189.00 monthly MIP payment to FHA for 10 years on a $125,000 loan, plus adding $4200 in closing costs to the loan. Bottom line the borrowers saved $32.00 a month from their previous payment. Were back at a 30 year loan, instead of the 18 years they had left, IMHO, there's no way I would have signed that loan package. But I'm not there to give advice.