The number one FHA and VA loan producer, Rodney Anderson proposed a streamline refinancing-patterned policy hoping it would be the solution to the foreclosure-caused housing slump. The program intended for Fannie Mae and Freddie Mac to implement is also expected to cause economic stimulation and monthly federal income from mortgage insurances.
The government FHA and VA streamline refinances have been effective for 20 to 30 years. To adapt to the recent needs in the foreclosure crisis, with a little common sense and a few adjustments it could be implemented for more beneficiaries. Good borrowers, on-time payers can dodge loan delinquency and even home repossession.
The streamline refinance policy in effect allow debtors who has been current in 12 or more of their most recent FHA or VA payments to refinance in more affordable loan rates without re-qualifying.
In this revised program, Fannie Mae and Freddie Mac will implement the same policy to compliant loans and borrowers with a 12-month on-time payment record.
Responsible lending. This proposed streamline refinancing is for the noble borrowers who will benefit by refinancing with more manageable interest rates. This will hopefully protect them from foreclosure.
But lenders must be protected. So, mortgage insurance must be mandated to 30 to 40 percent rather than the old standard of 22 percent. Borrower protection from deceitful lenders must be implemented too. With monthly loan insurance payments, the government will even have an inflow of revenue from the borrowers.
With the continuous increasing of repossession cases, the brilliant revision of Fannie Mae and Freddie Mac of the streamline refinancing policy is just in time. Though this is not enough to save the housing industry and homeowners from foreclosure, it is a great initial step in the long awaited economic recovery.
Article Source: http://www.ezinefinance.com
