Getting Personal
The Administration's home refinance program
Question: WE OWE 3 mortgages at 5.3755% 6.25% 6.98% for three different homes. Would we be qualified to refi under the HOME AFFORDABLE REFINANCE program with the current rate under 5%? Thank you so much. Mai, Los Angeles, CA
Answer: It's always worth a phone call to try and negotiate a deal, but I doubt that you'll qualify under the Administration's program. The reason is the way the Administration's homeowner rescue plan is designed, it explicitly won't help out anyone with homes purchased as an investment. The home must be owner-occupied. The federal government says it doesn't want to be bailing out speculators (unless they call Wall Street home and gambled with billions of dollars).
The Administration's home rescue plan is complicated with a number of twists and turns. For instance, the federal government isn't reaching out to borrowers who misrepresented their income on no-doc loans. The plan loosened the rules so that homeowners current on their mortgage can refinance even if their mortgage represents as much as 105% of their home's current value. But the sharp decline in prices in many parts of the country means many troubled homeowners still don't qualify for relief.
I would call your lender and see if you qualify for a refinancing under their normal guidelines.
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