Fannie Mae and Freddie Mac Refinances up to 125% loan-to-value

Examiner.com ^ | July 1, 2009 | Julie Messina, CMB

[unique]

Today the US Treasury Department announced an update to allow refinancing of mortgages backed by Fannie Mae and Freddie Mac up to a first lein position of 125% of the home’s appraisal value. This is a level that was previously set at 105% loan to value.

[unique]

I cannot image going for a 125% loan to value. Our Federal Government must run a really more than passingly strange set of books.

[Frantzie]

This is guarantees more fraud, corruption, defaults, bailouts and on and on. It is Obama’s way to wipe out the middle class.

[thesharkboy]

Wow. This is a really deep hole we’re in. I’ve got an idea. Let’s keep digging.

[C19fan]

You got to be kidding me. Given the current state of the market where these loans will be written, FL, CA, NV, AZ, this is an basically an unsecured loan. This is a great opportunity for banks to dump loans from their portfolios into Fannie and Freddie loans. Of course this is guaranteed to happen:

Next year's headline: Fannie and Freddie Ask for Another $100 billion bailout.

[coconutt2000]

I’m trying to remember what this was called before Obama became President...

Oh yeah, “fraud”.

[Myrddin]

The aub-prime problem was fueled to failure with 105% loan to value. It will be in overdrive at 125%. Total insanity. The policy is aimed at complete destruction of the economy.

[Sleeping Freeper]

Barney Frank to the rescue.... we’re on a sinking ship folks...

[east1234]

If you have an ARM and the value has dropped 40% you would, or you'd end up foreclosed. I have a fixed second as a result of a recent divorce. Have been unable to refinance due to drop in value. Maybe I can do so now. I, and many others, are good for the money. Those who bought way above their means are the problem, they should be ineligible for these loans, but won't be.

[Onelifetogive]

Ok, here’s the deal...I want a 125% loan, then I want the government to immediately forgive part of the laon if I am “underwater”...

[combat_boots]

Fann & Fred going on an unlimited credit binge on the full faith & credit of the US?

People will end up being cotton and artichoke pickers. Artichoke fields smell awful.

[gathersnomoss]

I can’t read this sh*t anymore. Grab the handle and pull down....

[thesharkboy]

I, and many others, are good for the money.

I'm sure you are, and I sympathize with you in your situation. However, why is it my responsibility to help you refinance your loan? Has it become a right in this country to own a house?

[Dick Bachert]

[WOBBLY BOB]

The sub-prime problem was fueled to failure with 105% loan to value. It will be in overdrive at 125%. Total insanity. The policy is aimed at complete destruction of the economy.

yet the libtards will continue the "our dear leader inherited this" mantra.

[unique]

Although I see your point, lots of those securing the 125% will default and the loss will be 30%-35% to the government which owns these entities - that’s a loss to all of us.

Handing out 25% more than the property is worth is welfare.

Actually, I’d walk away from the house - but, on the other hand - I wouldn’t buy the house in the first place.

[east1234]

Of course it isn’t your responsibility to help me, or others. I don’t have to refi, I would like to in order to save a couple of hundred a month in interest. I can afford the house either way, if I couldn’t i’d have never bought my screwball ex out of it. By the way, how does raising the cap to 125% cost you anything? As long as the borrowers don’t default,it will cost you nothing. If people with ARM’s, NOT ME, can refi to a fixed, there will be fewer defaults, costing everyone less. Allowing the high risk loans in the first place was the mistake. Also, the fewer forclosures the quicker the housing recovery. Values won’t improve with more and more empty houses on the market for lower and lower prices.

[thesharkboy]

Why is it my responsibility to prop up the housing market?

[mj1234]

I agree -Total Fraud-

Fannie and Freddie had about 70 billion in assets
AND 1.4 TRILLION IN DEBT-!!

that is what caused the current disaster-

GET ready for Round 2!!-

THE DEMONRATS ARE DESTROYING AMERICA!

[ModelBreaker]

“This is guarantees more fraud, corruption, defaults, bailouts and on and on. It is Obama’s way to wipe out the middle class.”

Actually, I think it’s his way of kicking the can down the road until after Nov 2010. He’s looking at the polls and they are leaning to big R pickups in congress. The CCI is way down this month, which means people are finally figuring out how grim things are despite all the media happy talk. That means the recession deepens from now til the election unless you can take a bunch of foreclosures and push them off until after 2010. It probably does anyway; but this smacks of desperation in response to the jump in treasury rates and home mortgages—the feds are losing control of interest rates.

Not a good situation if you want to keep 60 senate seats. Desperate times call for desperate measures and all that.

[precisionshootist]

“Also, the fewer forclosures the quicker the housing recovery.”

This is part of the problem. Forclosures are not the cause of the problem, they are the cure. Most of the “toxic” assets need to be taken back and resold to someone that can pay the bills. Simple as that. The only entities that should lose in this deal is the lender who made a bad loan and the borrower that can’t pay it back. LEAVE ME THE HELL OUT OF IT!!