hvactec
VIP Member
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
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
Then see how quickly they wanna' resolve it. It's just a numbers game, get the numbers on you side.
