Potential Broad-Based Refi Plan Aims To Level Playing Field 

This is the second of two parts of a summary of a hearing of the Senate Banking Committee held Tuesday May 8, 2012 during which Secretary of Housing and Urban Development (HUD) Shawn Donovan spoke on a range of housing issues but particularly on efforts to streamline and remove barriers to refinancing.  In addition to addressing the issue of "fundamental fairness" for borrowers, the plan also seeks to level the playing field among servicers and originators, as well as stimulate home-price appreciation, among other things.

Jeff Merkely (D-OR) asked Donovan what it would take, a regulatory or statutory fix, to address the limit on FHA loans to a 115 percent loan-to-value (LTV) ratio.  Donovan said it was actually an even lower ratio in practice but the proposal is for a broad-based refi to allow up to 140 percent with the clear view that any loan deeply underwater would have to be written down to those parameters.  That, he said, along with creating a separate fund from the FHA MMI insurance fund to protect that fund would be the key legislative changes required.Read More

If you’ve been looking at mortgage rates for a purchase or refinance, now may be a good time to explore. FHA and conforming rates contimnue to stay at low levels. Going forward, rates have much more room to rise than to fall.