Crash in Home Prices, Tight Lending Blocked 2.3 Million Refis

hvactec

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A new study by the Federal Reserve puts a number on a perplexing issue that has been on the minds of top officials in Washington of late. It finds that tight mortgage-lending standards and dramatic declines in home prices prevented about 2.3 million U.S. homeowners from refinancing last year.

The annual report, released Thursday, underscores the difficulties that policy makers have had over the past two years in encouraging more Americans to refinance their mortgages and take advantage of ultra-low rates.

The report found that those homeowners would have been able to refinance their loans if not for strict underwriting standards enacted after the housing bubble burst, and for home price declines that left millions of Americans owing more on their properties than their homes are worth. About 4.5 million refinances were made last year, the study said. As of the end of June, 10.9 million U.S. borrowers, or nearly 23% of those with mortgages, owed more on their properties than their homes are worth, according to data firm CoreLogic. An additional 2.4 million had less than 5% equity in their properties — making it difficult to refinance.

The report analyzed data from more than 7,900 mortgage lenders, which are required to report detailed data on mortgage lending to the Fed and other regulators under the Home Mortgage Disclosure Act. In total, 7.9 million home mortgages — including refinances, home purchases and other loans — were made last year by the institutions analyzed in the report. That was down from nine million in 2009 and a peak of 21.5 million in 2003.

The White House in 2009 launched an initiative called the Home Affordable Refinance Program that allows borrowers whose properties have declined in value to refinance without putting down more cash. It has enrolled about 830,000 homeowners, far fewer than expected. The Obama administration and regulators have been working on ways to expand access to that program.

The report comes as maximum size of loans that can be backed by government-controlled mortgage companies Fannie Mae, Freddie Mac and the Federal Housing Administration is scheduled to decline at the end of the month. The new limits vary by location, but will drop to $625,500 in expensive markets such as New York, Los Angeles and Washington from the current $729,750.

read more, video Crash in Home Prices, Tight Lending Blocked 2.3 Million Refis - Developments - WSJ
 

Truthmatters

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we saved them and this is how they reward us.

Tarp should have had a whole bunch of caveots on their behavior.
 

Mad Scientist

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Obama refi program only reworked 8,000 mortgages, I happen to know one of the lucky few. But why would the banks refi your loan when they can make so much more money when you default? Do a little research, it's true.

The only way to stop the foreclosure is to sue them in court (pro se) which stops the forclosure. While the case is making it's way through the system (which could take up to two years) you stop making payments. They can't throw you out until the case is resolved.

You save up all that money you would have been paying and either payoff bills or invest in Gold or Silver and make a killing before they throw you out (which is what they were gonna' do anyway). OR you could take all that money and go to the mortgage company and tell them this:

"Listen. This case is gonna' take time. I have plenty of time, you do not. You have a house that is paying you nothing while I live in it for free AND you have to pay Lawyers costs. I don't because I'm Pro Se remember? Here's what we can do: You guys Re-fi my house at favorable terms for me, say 200,000 for 15 years at 2% (or whatever). OR, I can take all this money I've saved up and buy another house directly across the street from this one!

What you wanna' do?" :lol: Then see how quickly they wanna' resolve it. It's just a numbers game, get the numbers on you side.

Or you can wait around for the US Government to save you. The choice is yours.
 

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