Mortgage Refinancing Under Freddie Mac Being Questioned
Real estate brokers, as well as small lending companies, are expressing their sentiments about the program of the new government under President Obama for the housing industry. This plan includes mortgage refinancing for homeowners who wish to keep their homes and take advantage of the lowest interest rates to date.
The new guidelines that were released this month are not the same for Fannie Mae and Freddie Mac, two government-owned lending companies that guarantee or own around 31 million home loan mortgages. This translates to about half of all the loans in the US. What is striking about this is the home loan mortgages under Freddie Mac are only allowed to be refinanced by a mortgage servicer.
Freddie Mac, being the number two mortgage refinancing company, holds around 13 million outstanding home loans. According to the company, the mortgage refinancing policy was set up to speed up the process of mortgage refinancing, as well as to control costs. However, both mortgage brokers and small lenders say that this would even reduce the number of homeowners who can benefit from this policy. The new administration under President Barack Obama said that the home mortgage program could let around 5 million homeowners to get a home mortgage refinance plan at more affordable loans with fixed rates.
Smaller lending companies in the industry are saying that this policy is set to end up limiting the competition. This would mean that borrowers could possibly not get the best home mortgage deals. This rankles home mortgage brokers. According to them, they are the main point of contact for a lot of borrowers.
According to Marc Savitt, president of the National Association of Mortgage Brokers, President Barack Obama would have more opportunities to achieve his goals for the housing industry if he chooses to open this program to everyone. The home mortgage refinance program is currently being offered only to homeowners who have loans that are held by Fannie Mae and Freddie Mac. Homeowners have until 2010 to file an application for the program. During the past weeks, mortgage bankers and brokers have been looking into more details and trying to find borrowers who might be qualified for the program.
According to Ginny Ferguson, owner of the Heritage Valley Mortgage in California, there are a lot of confusion about this, since everyone is trying to get in the program. The government has to make it clear who is eligible and who is not.
