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Two News Stories Happening Now That May Improve Mortgage Refinance Possibilities

[Jun 18, 2009.]


"Refinancing is not as easy as it used to be" is not exactly a news flash.

There are, however, some things happening in the mortgage finance market that could make refinancing easier. Mortgage holders who are in the process of refinancing or looking to refinance should keep an eye on these happenings. Two news items to watch with particular interest are, in no particular order:

Mortgage Czar Appointed, But What Does That Mean?

Okay, "czar" may be something of an exaggeration, but still the fact remains: the Obama Administration is dipping more than a toe into the waters of mortgage regulation.

As anyone who has ever obtained a home loan knows, there is no lack of regulation in the mortgage market. But, judging by the mortgage travesty of the last few years, there may be a lack of effective mortgage regulation. Or at least the Obama Administration seems to think so.

And has acted accordingly, granting the Federal Reserve extended (albeit unclear) powers to "protect" mortgage borrowers.

What does that mean? Well, that's a great question. Follow the mortgage regulation debate in Congress over the next weeks and months and find out. The meaning of "protect" could quite literally change the mortgage market in an instant.

For example, Congress could outright ban "exotic" mortgage products such as negative amortization ARMs. A ban--and the bad publicity it would bring--might entice banks to renegotiate certain loans to enable a mortgage refinance, rather than foreclosing on a homeowner.

Expanded Home Buyer Credit Could Start Prices Rising Again

Home builders and real estate developers are lobbying hard in Congress for an increased tax credit for home buyers. Under the plan, all home buyers (not just just first-timers) would receive a $15,000 credit for purchasing a home. Given the massive influence of the home builder lobby, don't rule this out.

IRS figures show that the more limited home buyer tax credit is working. Meanwhile, home building statistics are improving, with new home construction up more than four percent in a recent report.

What does home buying have to do with home refinance? Another great question.

An increase in home buying could stabilize or even drive up house prices. With almost 20 percent of U.S. homeowners owing more on their mortgage than their home is worth--an automatic disqualification for the vast majority of home refinance options--any upturn in home prices is a godsend for refi hopefuls.

The Good News: The News Is Not All Bad

In short, watching the news may no longer constitute an invariably painful activity for homeowners hoping to refinance. Not to say that happy days are here again, only that it's once again safe to turn on the TV.

To obtain a current refinance quote, click here.


About Author:

Andrew Freiburghouse is a writer and businessman. He has worked as a magazine reporter, tax preparer, screenwriter, copywriter, and loan officer. He graduated from Santa Clara University in 1999 with a B.A. in English. Andrew was born and raised in the City of Los Angeles.

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