Posted on 03/06/2012 9:28:35 PM PST by Rabin
In a couple hours, President Obama will detail for existing FHA loanholders to do streamline refinances with less mortgage insurance. A streamline refi means you (may need neither an appraisal nor an income verification), so that would enable underwater homeowners with FHA loans to refinance out of their existing (underwater), loans. This is interesting because right now there are lots of FHA loans with rates much higher than current 30yr FHA rates of 3.75% no points. Problem is that these people can’t refi because the FHA requires streamline refinances (whether underwater or not) to provide 5% savings to the borrower—sum of new mortgage payment, taxes, insurance, mortgage insurance (PITI) must be 5% or more lower than existing PITI.
(Excerpt) Read more at thebasispoint.com ...
http://www.whitehouse.gov/the-press-office/2012/03/06/fact-sheet-president-obama-announces-new-steps-provide-housing-relief-ve
R.
So, on a $1,000 PITI mortgage payment, if the streamline refi does not lower your payment by $50, FHA won’t do it.
Duh! Who would bother?
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