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FHA's HARP Program Extended (And Pretended) By One More Year To June 30, 2011
Lest someone think the market is all safe and sound, here comes the FHA to remind that without government subsidies we are all staring at the sub 666 S&P abyss.
Federal Housing Finance Agency Acting Director Ed DeMarco today announced the extension of the Home Affordable Refinance Program, (HARP), a refinancing program administered by Fannie Mae and Freddie Mac, to June 30, 2011. The program is a key component of the Administration's Making Home Affordable Program announced last February. The HARP program expands access to refinancing for qualified individuals and families whose homes have lost value. The program was set to expire on June 10 of this year.
"FHFA has reviewed the current market situation and the state of mortgage insurance availability and has determined that the market conditions that necessitated the actions taken last year have not materially changed," said DeMarco. "Accordingly, to support and promote market stability, and to encourage lenders and other mortgage market participants to fully adopt the HARP program, including the implementation of the October 2009 expansion of loan-to-value ratios (LTVs) to 125 percent, FHFA is authorizing the extension of HARP until June 30, 2011."
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HARP = SCAM
This program will become perpetual. Another god damn effort by the left to buy the votes of the scum and worhthless shit that caused this mess by living beyond their means.
Soon to be followed by the extension of the fed MBS buyback program.
Soon to be followed by the expansion of the fed MBS buyback program.
Deliberate collapse of the system, by design
Ah...there is nothing better for the housing market than ADDING more mortgages with LTV ratios of 125%.
It's not like that is exactly the kind of crap that got us in trouble in the first place...
Lather, rinse, repeat.
There is a difference. I believe these new refi's are recourse loans. If that's correct, then people who refi are never walking away from what they owe. Such a refinancing is simply a trap for the unwary.
I think that depends on state law? Some are, some are not.
it is state law from everything that i understand.
" I believe these new refi's are recourse loans."
Yup.
If you sign on the dotted line for a:
HAMP, HARP, HUMP or whatever Timmay G/ FHA Refi program...
You agreed to a recourse loan... state law is not a factor because you agreed to wave your non-recourse rights...
If you sign on the dotted line for a:
HAMP, HARP, HUMP = Underwater SCREW Job
WOW. I work in real estate and read a lot of RE blogs, but I had not heard this information. I have never advised anybody to use this program (mostly because people around my area don't qualify for it), but now i have even more reason to tell them NO.
I maybe off on this Bear_cub... on a short sale depending on the ass hole factor of the lender, they try to slip a clause in the short sale where you agree to recourse on any balance left after the short sale. Sorry...
I am checking with a legal friend on the terms of HAMP refis in non recourse states. Of course the Richmond Fed stated (policy paper) non recourse laws encourages defaults by the peasants on their usurious mortgage debts.
We can't have peasants acting like Wall Street banks and corporations and waltzing away from their debt obligations and commercial property mortgages <cough> Morgan Stanley <cough> now can we...
Those unscrupulous unethical little dweeb peasants...
Barney Frank said everyone is entitled to own a home.
I seem to recall from grammar school [1950’s – McCarthy - A bombs] that taking from those who have and giving to those in need was called Communism.
1. You're showing your age.
2. I've railed againt this for ages. Especially annoying while I was looking for work. Lots of managers screaming "I need, I need!" but only if "somebody else" does all the work (what five-year personnel investment/development plan?). *shrugs* Glad I didn't have to take a job working for them. :)
3. Most people who suddenly "need" something are the same one's who didn't prepare when they had the chance (I'm guilty of not preparing as much as I should have--correcting that oversight currently).
What a fucking joke.
Debt Slavery by its real name
Wow. they know this doesnt end well. They know that aswell as you and i. Extend and pretend. But no ones pretending anymore.
I am fearing more than financial hardship at this stage.
Last summer, we spoke to a colleague of ours in Chicago. Robb is a friend of Rahm. He interated a conversation he had with his good White House buddy. It basically wents along these lines. Publically, they are in "total control" of the economy. Privately, he said "they are scared shitless" and have "little idea what they hell they're doing." And, "they have no practical experience outside for economic theory and academia." Considering the endless spending programs like above, his general assesment seems correct.
Thanks for bringing this back to our attention, AR.
I'm gathering that the central part of the strategy is that the government will do whatever it can to delay the real messy stuff by extending programs such as HARP all the way up to the 2012 elections.
Then it becomes someone else's (much bigger) problem in 2013.
The question is... can they really hold out that long? My guess? Sure... but they will need lots of help from the Fed. Something tells me Uncle Ben is already bought and paid for...
+8
November is going to be a problem for them. The new crop of legislators are going to be pushing for transparecy that the current administration can't afford. Congress will be tied up in its own knickers until 2012 or until somebody starts talking...
thx AR.
I'm confident that they are scared; they should be! Anyone with half of a brain and a remote understanding of economic history can easily recognize enormous risk potential and there are plenty of risk points throughout the entire world. I keep coming back to the old story of plugging the dam with fingers and bubblegum.
Barry's probably up to 4 Marlboro red packs a day, DH. Smokes in a tree out back of the Oval office, since Hillary banned smoking on the grounds years ago and Michele's always watching and on his ass.
Libs sure are funny about their vices.
is he a marby guy? i hear they go up on the WH roof to hide and smoke 'em.
the photog who gets a pic with Barry with a cig is gonna make some nice coin....
huffpo got an article that says cali debt worse than Khazakistan (sp)....yikes!!
You know, I cringe at the thought of all the money I could have saved if I "didn't" payoff my mortgage in 2007!!
I cringe at the thought of putting down $600,000 down on 1.8 million
dollars of raw commercial groand that at time aprraised for $ 3.3 million
I already had ut under contract for 3.3 mil as is. Thatvwas in July 07
needless to say by feb 08 my offer was 1.2 mil. I should have paid off my house instead of watchinging it go to the block this week. Luckily I won't have to worry. I'll be bressed with the deep sleep of narcotics in the operating romm.
When this doesn't work, look for either Government subsidized low mortgage rates, or 100 year mortgages like they have in Japan and Europe, or both.
40 year mortgage is the most I've ever heard of in Europe. And you probably have be less that 30 to apply.
A new neighbor of mine here in America is 79, single (widowed to be exact) on SS, receives a small government pension and an even smaller private pension. No earned income. He had been renting somewhere else for the past 15 years (since his wife died) and he just received a brand new 30 fixed mortgage when he purchased next door. The broker didn't even insist he purchase life insurance to cover the mortgage.
We've only just begun.....to live.
e broker didn't even insist he purchase life insurance to cover the mortgage.
Cog....i'm virtually positive that it is illegal to require life ins due to Fed regulations....i could be wrong as i'm rusty from my banking days but i don't think so.
I agree, I was trying to be funny, hence the last line about living. I was riffing on the prior poster who was talking about 40 year mortgages and only giving them to 30 year old people in Europe.
But my new neighbor is 79 and does have a new 30 year fixed.
Twenty or so years ago I talked with a gent from the Netherlands who had a 100 year mortgage. He thought the 'American Dream' to own a home outright was ridiculous. 100 year mortgages in Japan began in the late 1980's, I believe.
"....100 year mortgages like they have in Japan and Europe....."
Cradle to grave mortgages. When born, a social security number and a mortgage are issued pronto. Brilliant!
Interestingly, I'm looking at an RFP from FM right this very second. Here is the 2 paragraph mission provided:
"We exist to expand affordable housing and bring global capital to local communities in order to service the U.S. housing market.
Fannie Mae has a federal charter an operates in America's secondary mortgage market to ensure mortgage bankers and other lenders have enough funds to lend to home buyers at low rates. Our job is to help those who house America."
Disgusting.
Personally, I'm looking forward to the implosion of FHA just so I can write my congress critter to say "i told you so".
FHA will implode very shortly after the election in November: they will hold it off until then as all of you know.
Ha! Too funny.
Actually, this program is only for loans ALREADY guaranteed by Fannie or Freddie and because the new loan cant be larger than the current balance of the outstanding loan, the program has the "potential" to lower the crdit risk to the agencies. That is not to say they will lose many more billions going forward but this program is designed for people who are actually making payments on a higher rate mortgage but have been unable to refi due to loss of equity in their home. This program actually makes sense in that they are already "long" the risk.
The only "problem" is these refis are in violation of their charters. According to their charters, they cannot buy new mortgages with LTVs over 80 without credit enhancement, usually mortgage insurance.
The FHFA "got around" this inconvenient law by getting a legal opinion that these were not "new loans", but rather "modifications". Which is total bullshit, because a new mortgage note is created.
IMHO they should just scrap the mortgage insurance requirement entirely, and let the GSEs buy over 80LTV mortgages without credit enhancement. that way, when they are rolled into the FHA, like they should be, the transition will be easier, since the FHA does not require private MI.
I agree - at the very least, it violates the spirit of the charter but at the margin, it does reduce their credit risk. That is the point I am trying to make to this community. This policy is actually good for tax-payers - bad for premium mortgage holders - assuming ipeople actually do refi.
They should just walk away from the mortgage/housing market...follow China's lead.
Exxtend and pretend...haha!
Will Brian Moynihan be the only one voting for Barney MumboJumbo Frank in November ? An who is voting for Harry Reid ? How about Bunning from Ky ? Is he up for re-election ? I actually think he is the only guy who would deserve my vote even though some of the unemployed folks would be mighty irritated.
Zerohedgies:
Check out this news item that wasn't widely reported-
Mortgage Bankers Association Defaults on Headquarters Loan.
http://cosmos-justice.blogspot.com/2010/02/bortgage-bankers-assn-default...
Ironic and sad considering this statement: "The CEO of the powerful Mortgage Bankers Association, John Courson, has said that underwater borrowers should keep paying on their mortgage loans and “should not walk away from lawful debts”. In an interview this past year, Courson appeared genuinely concerned adding: “What about the message they will send to their family and their kids and their friends?”
We may have jumped the shark.
You want to read something, read this.
Pretty clear where we are heading - nationalization of the housing market. Not just the mortgage market like we have today, but the underlying houses.
http://www.housingwire.com/2010/03/01/a-dark-day-for-the-mortgage-industry/
ghost...i cannot believe it. un-phucking-believable. thank you for posting that and i'll keep my eye out to see if the financial media picks up on it.
wow......
I was pretty blown away myself, thank God the editor at HW decided to comment on it, it is pretty below the radar. Even I had not heard about it, kind of got lost in the noise of all the other announcements. Would be a great topic for ZH, I think, no one else is picking it up.
BS to collect rent? Big Brother is watching you!
I saw this earlier today - scary stuff. They are socializing losses thru the GSE and FHA and it needs to stop. Renters and responsible borrowers will pick up the tab for bad investments. Obama will blame the banks (which deserve some of the blame). Would not want to be a equity holder in banks because they will be sharing in these losses.
Horrible...absolutely horrible. I cannot even believe they're considering this.
How much longer can this fucking shill game go? This will end very, very badly! Stupid ass unelected bureaucrats!
Harp for doing god's work?
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