Blog Talk Radio Show September 12, 2011: Obama Refi Plan

Last Thursday evening in a speech before Congress President Obama announced, among other job creating ideas, a plan to make it easier for millions of people to refinance  their loans.  He provided no details.  Since then other Administration officials have discussed the benefits of such a plan, but still with no details.  Believe me, the devil is in the details.  A massive refinance program could occur with just a few guideline changes by Fannie and Freddie.  It would apply to only those loans already owned or guaranteed by Fannie or Freddie, but that is a lot of loans.  Fannie and Freddie could eliminate LTV as a consideration.  They could ignore debt to income limits.  They could make it very easy.  But they would need to waive the originator reps and warrants.  Who would refinance a loan to earn a point or so, if they could be on the hook for a loan with a 175% LTV?  The refi plan could go in a different direction.  The Agencies could decide they will just modify their owned or guaranteed loans, leaving mortgage originators out of the process.   I expect a formal plan will be put forth soon.  It makes too much sense politically not to do this.  Let’s hope the plan includes us.

Click PLAY to listen to the podcast of this week’s BlogTalkRadio/Lykken on Lending with Dave Lykken and MBSQuoteline‘s Joe Farr:

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