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

2017-12-20T17:34:15+00:00 September 14th, 2011|Categories: BlogTalkRadio Podcasts|Tags: , , , , , , , |

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 [...]