A reader sent this in:
An article in today’s Wall Street Journal sounds like the HARP program should be named CRAP, because Fannie/Freddie are holding the line by not allowing HARP refi’s on loans over 6% to appease their bond holders, and the Bond rates increased yesterday on this news.
All while our guviment is out there saying they are trying to ‘help’ homeowners that are stuck with high loan rates and high LTV’s that do not allow them to refi, as long as they are current. Other recent news showed Fannie/Freddie Execs are getting massive payouts, while homeowners bend over and take it.
I am in this group over 6% trying a ‘streamlined’ Wells refi but Fannie will not approve it under HARP and I am being forced to paydown approximately $22,000 to keep the new 1st plus 2nd HELOC that is being subordinated under a combined 95% LTV.
Here’s an excerpt of the WSJ article:
NEW YORK—Mortgage-backed securities issued by Fannie Mae and Freddie Mac jumped Wednesday, as investors grew more confident that new incentives to boost refinancing for borrowers stuck with high-interest-rate loans would have a limited impact.
Fannie Mae 6% mortgage-backed securities—backed by 6.5% home loans—rose 8/32 to 109 14/32, outpacing gains in Treasurys by about 7/32 after accounting for the change in interest rates, according to Credit Suisse’s Locus analytics. Prices fell late in the day, after Fitch Ratings warned about the European debt exposures of large U.S. banks, which are some of the biggest buyers of mortgage-back securities.
“There was a big fear that you’d see a big rise in prepayments, and, based on what [Fannie Mae and Freddie Mac] said, that has receded,” said Todd Abraham, co-head of the government- and mortgage-bond group at Federated Investors in Pittsburgh. “It doesn’t look like they’ve done anything big here.”
The changes to HARP came after more than a year of speculation that the administration would enact major overhauls of mortgage programs to help lift home buying out of its five-year slump. The talk persisted even as banking groups and some investors warned that rewriting rules could discourage buyers of the securities and result in higher interest rates.