Obama’s Mortgage Refinancing Program May Be Expanded (Update1)
By Dawn Kopecki and Jody Shenn
June 19 (Bloomberg) -- Fannie Mae and Freddie Mac may get permission to begin refinancing mortgages with loan-to-value ratios above 105 percent as the Obama administration seeks to boost participation in its anti-foreclosure programs.
“We’re actively considering how to structure a program that makes sense over 105 percent,” Federal Housing Finance Agency Director James Lockhart said yesterday. He said a ratio of 125 percent “is a number” that’s on the table, though “not necessarily the number we’re going to end up with.”
President Barack Obama’s Home Affordable program announced Feb. 18, sought to help as many as 5 million Americans who may owe more on their mortgages than their homes are worth. Fannie Mae and Freddie Mac have refinanced 80,000 loans under that program, Lockhart told a National Association of Real Estate Editors Association conference in Washington yesterday. He didn’t say when the loan-to-value ratio could be raised.
“While this will help some borrowers with higher interest rate loans, you really need to get mortgage rates down below 5 percent to have a huge impact on refinancing,” Scott Buchta, a strategist at Guggenheim Capital Markets LLC in Chicago, said.
Home Affordable has been “seeing a slowdown” as mortgage rates increase, Lockhart said. The average rate on a typical 30- year fixed loan was 5.38 percent in the week ended yesterday, according to Freddie Mac. The rate is up from a record low of 4.78 percent at the end of April.
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The bubble burst but the criminal bankers running our government won't let the prices fall. That would expose the Ponzi for what it is - a scam that would make Bernie Madoff blush.
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When the commercial real estate market crashes later this year or early 2010, the Ponzi will be exposed and the house of cards will fall. Just like they are planning it.
Liability in a default on a first mortgage is zero in most states. Liability on a refi default is 100%.
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