Too many people in business don’t want to help someone else out unless there’s something in it for them. I don’t agree with that philosophy. As a matter of fact, there’s a proverb that says “there is that scattereth, and yet increaseth; and [there is] that withholdeth more than is meet, but [it tendeth] to poverty”. So, I’m going to scatter a refinancing secret for the Lenderama mortgage brokers. I honestly thought more people knew this, but here goes.
You know how values have dropped prohibiting the refinancing of the 2/28, 3/27 crowd. Well, many of those loans are 80/20’s. Take a look at page eight of the American Securitization Forum’s December 6, 2007 paper Streamlined Foreclosure and Loss Mitigation Framework for Securitized Subprime Adjustable Rate Mortgage Loans where it says:
“All servicers of second liens to subprime borrowers should cooperate fully with this framework by providing information needed by first lien servicers and by agreeing to subordinate the second lien to any new first lien resulting from a refinance (with no cash out) under this framework.”
OK, so that and the fact that FHA allows a 97% LTV with no CLTV limitations and now many of you are back in the refinancing business.
Posted by Paul - Florida FHA Mortgage
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3 responses so far ↓
1 Howard // Feb 3, 2008 at 6:18 am
Paul,
Did you see the article in the National Mortgage News last week?
Five leading lender groups that are supporting quick passage of the FHA reform bill want the House & Senate banking committee leaders to drop a provision that would allow mortgage brokers to purchase a $50,000.00 surety bond in lieu of meeting the current FHA net-worth and audited financials requirements. They argue that there is no federal oversight of brokers and I quote, “it is critical that they continue to submit the annual audited financial statements to the FHA in order to participate in the program, more importantly, protect the integrity of the FHA.” Are you kidding me? Who are these born again, holier than thou lending groups who’s existence is predicated on the maintenance of FHA integrity? The very same associations that just led the country into the worst credit crunch since the great depression. I found it actually a bit funny to see, “The American Institute of Certified Public Accountants,” they get paid for the overpriced audits. Someone pass me a bag! This is about market share and keeping brokers from shopping the lenders/banks for their clients. Frankly I don’t give a hoot about the audit, it can be done for around $3,000.00. This integrity based mortgage broker finds the net worth requirements to be the problem. In today’s environment how does a new MBB owner establish and maintain a $63,000.00 business net worth, 20% of that mandated to be liquid. The NAMB has countered that surety bond provisions in the House-passed bill have, “belts and suspenders to protect the FHA program. National Association of Mortgage Brokers executive vice president Roy DeLoach said, he stressed that the FHA commissioner can control the number of brokers using surety bonds. In addition, EVERY broker HAS TO BE coupled with an FHA-Approved direct endorsement lender, who reviews every loan before the closing!
AMEN to that! I want access to FHA so I can be a part of the solution!
Signing the letter were; The Mortgage Bankers Association, The Lenders One/National Alliance of Independent Mortgage Bankers, The Independent Community Bankers of America, The American Bankers Association, The American Financial Services Association, and the American Institute of Certified Public Accountants.
2 Diane Cipa // Feb 3, 2008 at 11:07 am
Wow, I had no idea FHA had no CLTV limitations. Great tip.
3 Fha Refinance // Feb 7, 2008 at 6:58 pm
Thanks for the information.
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