The Mortgage Companies of America (MICA) announced guideline changes that allow up 125 percent loan-to-value ratios for refinancing mortgages that are HARP (Home Affordable Refinance Program) eligible.

This higher LTV should definitely provide assistance to homeowners being crushed by their monthly payment by giving them the opportunity to secure a lower monthly payment.

Remember that members of MICA had helped nearly one million families save funds by refinancing or buying a home with less than the traditional 20% down payment.

The CPA on my team has reminded several people that private mortgage insurance premiums are now tax deductible for many borrowers who refinance or purchase a home.

Why are the interests of borrowers, mortgage insurers, and investors so closely linked?

Simple.

Unnecessary Sandpoint foreclosures harm everyone: families lose their home, the mortgage insurer pays a claim, and the investor has a financial loss.  I was also asked what a non-GSE loan is.  GSE (Government Sponsored Enterprise) is a common reference to Freddie Mac and Fannie Mae.   Fannie was born in 1938 and Freddie was birthed in 1970.  These publically traded companies help banks and lenders maintain liquid funds by purchasing conforming loans.

Most folks know that GSE backed loans offer a scenario where you can purchase a home with no money down if you are a qualified buyer and that they offer a version of “Expanded Approval” loans for borrowers with less than stellar credit. However, I am surprised at the number of investors that are completely unaware that there are GSE backed loans they can take advantage of through Freddie and Fannie.  These non-owner occupied loans typically require a minimum down payment of 10 percent and Multi-Unit financing can exceed the current limit of $417,000 dollars.

Since there are normally more buyers in the secondary market for Fannie Mae and Freddie Mac, the GSE’s can offer a lower rate on their loans.  Investors may not know that GSE backed loans have stated income programs available to those with outstanding credit ratings.  These loans are meant for those who cannot easily document their true income and not for people who do not earn enough money to qualify otherwise.

I have discussed the U.S. Department of Housing and Urban Development’s Neighborhood Stabilization Program in the past.

This is the initiative that encourages redevelopment of neighborhoods that have suffered the most due to foreclosures and facilitating the resale of properties to home owners.

Bank of America will now notify participating cities that properties are available before they are listed on the MLS. The company will set the price with no haggling allowed.

Stay tuned for how this interesting development might affect us in Sandpoint, Idaho.