Stated income, no doc and no income verification loans were all very popular home loans a few years ago.  What started as a convenience mortgage for self-employed borrowers turned into a popular choice for all types of borrowers because it was easy but for many people it enabled them to qualify for a loan that they reall could not afford.  Brokers and lenders clearly pushed the envelope on no income mortgage loans over the last decade and the mortgage inustry is paying the price for all of the loan defaults and foreclosures right now.   

Today the only know no income mortgage refinance option is the streamline loan.  This popular government refinance loan is available with the VA streamline refinance and the FHA streamline refinance.  These programs do verify employment, but at this time they are not verifying income.  This refinancing loophole has helped thoussands of borrowers refinance even though their debt to income ratio was higher than the loan program allowed.  For more infomation about the streamline loan program read the recently published article, The Streamline Refinance, the Best Kept Secret in the Mortgage Industry.

1. Work with a Trusted Mortgage Lender – It is imperative that you work with a loan professional that you trust.  If you need a VA mortgage, make sure that you work with an experieinced VA lender.  If you need a FHA refinance, it’s in your best interest to allign yourself with a loan company that understands the FHA loan programs inside and out.

2. Shop for the Best Refinance Rate Online - Spend some time doing your due dilligence and compare quotes from competitive lenders.  Strive for a no cost mortgage refinance loan, because it can save you thousands of dollars.

3. Beware of Mortgage Insurance  – When refinancing a mortgage, almost a third of homeowner could pay a portion of their home equity to eliminate mortgage insurance. Borrowers don’t realize that FHA loans charge monthly mortgage insurance. If you have the ability to make some cost-effective home improvements, you may be able to get the value increased enough to wave good-bye to mortgage insurance. Another method homeowners do is to use your credit cards to pay down the balance of your mortgage with credit cards, but we don’t recommend increasing your revolving debt to get rid of mortgage insurance. But, if you are borrowing more than 80% of your home’s value, you will be hit with private mortgage insurance, costing you hundreds a year.

4. Ask About Lending Fees – Fees are a hidden cost of many mortgage loans. By law, lenders must disclose fees within three days of a loan application. Fees can go by many names like – document prep fees, courier fees, administrative fees, and more.  When comparing home refinance loans online, request a list of fees from several lenders. Add these loan fees with the mortgage interest incurred. With these calculations, you may be surprised that the most cost-effective refinance did not have the lowest mortgage rate.  Read more Mortgage Refinancing Tips

Fannie Mae accomplished a few of their goals with the  DU refinance plus program, but with home values declining further, Fannie Mae quickly found that 105% wasn’t enough as lenders still struggled to qualify borrowers with the DU Refinance Plus program.  In an effort to stem the foreclosure crisis, Fannie Mae worked out a more agressive refinancing alternative with Freddie Mac.  They called the program the Home Refinance Affordable Program and borrowers were able to refinance their first mortgage lien up to 125% loan to value.  The Home Affordable Refinance Program was as introduced to supplement the reduced cost mortgage refinancing efforts that many of the lenders were extending to distressed homeowners.    This program was warmly received as thousands of borrowers looked to to the Home Affordable Refinance for securing them a lower mortgage payment. 

The Fannie Mae refinance loans have made a positive impact on reducing foreclosures, but the Obama administration wanted to go a step further.  Emergency Homeowner Loan Program is set to roll out in September and this FHA short refinance loan will actually write down the mortgage balances to the fair market value.

Loan originators are always looking for lending loopholes that will give them an edge over their competition’s loan programs.  With only a few loan programs in today’s tight lending environment it can get frustrating for loan companies to carve out a niche.  As with many industries, knowledge is power and loan officers that learn their guidelines backwards and forwards for VA and FHA loan programs truly are a few steps ahead of their competition.  Not only does loan product knowledge earn you credibility with your borrower, but it actually enables you to get your clients qualified for a loan they would normally not be eligible for.  Both VA and FHA mortgages have a loophole with the streamline refinance.  If your clients already have a FHA or VA mortgage and they are having trouble qualifying for conventional refinancing because of credit, equity or income, then the streamline loan program may be the solution your client needs to qualify for a house refinance that saves them money while protecting them from foreclosure.   

Streamline Refinance Great Solution for Qualifying VA and FHA Borrowers

FHA and VA home loans do not have minimum credit scores requirements from the agencies however; most government lenders have instituted their own credit score minimum in an effort to ensure the mortgage originated can be insured.  The streamline refinance programs are available with both government loan products VA and FHA.  To qualify for a streamline refinance, borrowers must already have a government mortgage (FHA or VA mortgage) and are seeking a rate and term refinance.  Many of the VA mortgage lenders today have extended a unique refinancing opportunity with the VA streamline that require no minimum credit score.

Streamline Refinance Loan Highlights

• No Minimum Credit Score with FHA Streamlines
• VA Streamline Refinance with No Credit Score Requirements 
• 12 Month Mortgage History is required. 
• No Income Verification with Streamlines
• Skip Mortgage Payments when Streamline Refinancing

Get a Free Refinance Quote with No Obligation!

The Lead Planet, a mortgage lead generation company reported that refinance leads had steadily risen over the last few months.  Even the Mortgage Bankers Association reported that home refinance applications spiked in recent weeks as interest rates dipped to record lows consecutively.  MBA said that the refinance boom in 2003 experienced a much higher volume of refinance applications. 

Freddie Mac indicated last week that the average rate on a 30-year fixed rate loans below $417,000 fell to 4.42% with an average 0.7 point. That was down from 4.44% the previous week and from 5.12% at this time last year. Rates are about one-eighth of a point higher on loans between $417,000 and $729,500.  In most cases to get approved for these low conventional mortgage rates, a borrower today must have a FICO score of 720 or higher, a loan-to-value ratio of 80 percent or less and at least two years of fully documented income. However the government mortgage rates are just as low and the guidelines are more forgiving on credit with VA and FHA home loan options.

Another reality is that mortgage refinancing with bad credit is very difficult.  However both VA and FHA refinance loans are possible for borrowers that can demonstrate strong compensating factors.  Many borrowers have strayed away from conventional loans in favor of FHA mortgage refinance solutions.

Mortgage Loan Refinancing Activity Rises 17%

The Mortgage Bankers Association reported yesterday that while interest rates remained the same this past week, home refinancing activity spiked up 17%.  With the housing market stalled, nearly all the action in the mortgage market is in refinancing. Less than 20% of mortgage applications were for home purchases, for the week ending August 13the, the MBA reported. The survey covers more than half of U.S. retail residential mortgage applications.

Last week, the Wall Street Journal reported that low home loan rates appeared to be stimulating a significant increase in home refinancing. Many insiders believe that reduced lending fees and no cost refinancing options may have played a role in the increased refinance applications online.

With home mortgage rates at the lowest point since Freddie Mac began tracking interest rates, what more can the Federal Reserve do?  The Fed has little power left to lift the economy out of its rut. Congress, with an election looming, has no appetite for more stimulus. Typically, the Fed can lower home loan rates in an effort to stimulate consumer spending in hopes that it will invigorate the economy. But the benchmark interest rate controlled by the Fed has been almost zero percent for more than a year now. 

The Obama administration already funded the Home Affordable Refinance Program that enabled mortgage refinancing to 125% on select Fannie Mae and Freddie Mac mortgage portfolios in an effort to combat the highly deflated home values that have prevented many Americans from being approved to refinance into a more affordable fixed mortgage payment. 

Eligibility for the HARP home loan relief was difficult and not enough homeowners met the requirements set forth to refinance their underwater mortgages.In a recent article, Deutsche Bank indicated that there may be 20 million underwater mortgage loans that are outstanding by the end of 2011.  This puts a significant amount of pressure on homeowners that are already struggling with high unemployment and tighter loan guidelines.

 Now the government has given HUD the authority to approve an FHA short refinance option that actually reduces the principal mortgage balances.  FHA insures home mortgages, but the agency has nearly used their emergency loan reserves.  Who do you think is paying for this?   – - Yes the U.S. tax payers will be picking up the tab on this mortgage bail-out initiative as well.  And if that’s not enough risk for the government, they also agreed to another mortgage relief initiative with the Emergency Homeowner Loan Program that is designed to help self-employed and un-employed homeowners for six months.

The Fed announced this week they it would use the proceeds from its huge portfolio of mortgage securities to buy government debt. The idea is to make cheap credit even more affordable, particularly for things like mortgage loans.  The problem is that Americans who are worried about job stability, not to mention volatility in the stock market, don’t want to borrow. They saved 6.2% of their disposable income this spring.

Sure, the Federal Reserve still has options. It could launch another trillion-plus-dollar program to buy government debt or mortgage securities like it did when it was battling the recession and financial crisis.  But the Fed is unlikely to commit that much money unless things get a lot worse. Plus there are risks. Regulators are resistant to push interest rates on low rate home loans because they don’t want to artificially jump-start the housing sector like what happened that inflated the housing bubble.  The Fed could slash the rate it pays banks to zero in an effort to keep money parked there, a move aimed at getting banks to lend more, but banks are not exactly feeling cash-rich, either. 

As reported previously, home mortgage rates have fallen to record lows.  15-year mortgage rates fell to 3.92 % this week and rates on 30-year mortgage loans were published at 4.44 %.  Still, consumers aren’t in a mad rush to purchase homes and most homeowners are unable to meet the tighter guidelines for FHA refinancing.  HUD is considering implementing a minimum credit score and FHA guidelines may start requiring these higher risk borrower to put as much as 10% up for down-payments in an effort to stem foreclosures and loan defaults.  Many mortgage lenders believe that if the loan requirements were loosened for a period to get the distressed homeowners approved for refinance loans or loan modifications that our housing sectors will rebound locally and nationally.

Bill Apgar, HUD Senior Advisor for Mortgage Finance said today, “HUD’s new Emergency Homeowner Loan Program will build on Treasury’s Hardest Hit initiative by targeting assistance to struggling unemployed homeowners in other hard hit areas to help them avoid preventable foreclosures.”  Apgar continued, “Together, these initiatives represent a combined $3 billion investment that will ultimately impact a broad group of struggling borrowers across the country and in doing so further contribute to the Administration’s efforts to stabilize housing markets and communities across the country.”

Emergency Homeowner Loan Program to Help Refinancing Under-Water Mortgages

The Obama Administration today announced additional support to help homeowners struggling with unemployment through two targeted foreclosure-prevention programs. Through the existing Housing Finance Agency (HFA) Innovation Fund for the Hardest Hit Housing Markets, the U.S. Department of the Treasury will make $2 billion of additional assistance available for HFA programs for homeowners unable to qualify for mortgage refinancing as well as struggling to make their home loan  payments due to unemployment.

The Emergency Homeowner Loan Program will offer loan relief and assistance for up to 24 months to homeowners to struggling homeowners who are at risk of foreclosure.  This finance relief program is targeting homeowners who have experienced a significant reduction in income due to involuntary unemployment, underemployment, or a medical condition.  “We remain committed to helping struggling homeowners, and this program will provide additional assistance to states hit hardest by unemployment,” said Assistant Secretary for Financial Stability Herb Allison. “This is part of the Administration’s comprehensive housing policy that has helped to stabilize a fragile housing market and allows responsible homeowners the chance to reduce their monthly mortgage payments to affordable levels.” 

President Obama first announced the Hardest Hit Fund in February 2010 to allow states hit hard by the economic downturn flexibility in determining how to design and implement programs to meet the local challenges homeowners in their state are facing. Under the additional assistance announced today, states eligible to receive support have all experienced an unemployment rate at or above the national average over the past 12 months. Each state will use the funds for targeted unemployment programs that provide temporary assistance to eligible homeowners to help them pay their mortgage loan while they seek re-employment, additional employment or undertake job training. States that do not currently have Hardest Hit Fund unemployment programs must submit proposals to Treasury by September 1, 2010 that, within established loan guidelines, meet the distinct needs of their state.

The California home sales remain flat, but with sales prices down and San Diego mortgage rates at record lows, 2010 looks like a great year for buying a home in Southern California. For consumers interested in mortgage rates in San Diego, California you will be happy to know that California mortgage loan options are still very affordable. Below are the home mortgage rates as of 1:00 P.M. today in San Diego, California. The California mortgage rates on the 30-year fixed rate term ranges from 4.32% to 5%.  For new Southern California home buyers you will be pleasantly surprised with the San Diego home loan opportunities. 

Lenders	APR	Rates
National Average	4.894%	4.75%
Wells Fargo	4.848%	4.75%
Nationwide Mortgage	4.615%	4.5%
For borrowers who have been waiting to refinance, our Nationwide Lenders strongly recommend converting any variable rate mortgages into a fixed rate mortgage while money is so discounted.

California loan applicants can choose between FHA, VA, conventional and jumbo home mortgage loans.  California home loan rates fell again, marking the 7th straight week of record low interest rates.  California VA home loans are available to eligible veterans at mortgage rates starting at 4.125%.  California FHA loans are available to qualified loan applicants starting at 3.75% (5/1 ARM).  There is no doubt that if you can qualify for mortgage loan that this is the best time to lock into a lowest 30-year mortgage rate.

Take advantage of the Home Equity Loan Refinance Tips listed below:  

1.  Keep Your Credit Score Above 680 – Do your best to keep your credit score above 700, but at least 680 because this will give you more home equity options.

2.  Make Your Home Equity Loan Payments On Time – Home equity lenders want to see that you have a history of paying your equity loan without being late.

3.  Get a Licensed Appraiser Who Knows Your Neighborhood – You want a licensed local appraiser to document your home improvement and maximize the value of your home.

4.  Check with Your Home Equity Lender to See if They Will Convert Your Variable Credit Line to a Fixed Rate.  – Most lenders have the ability to do a note modification that can specifically convert your adjustable rate home equity line of credit into a fixed rate home equity loan.

5.  Consider Refinancing Your Home Equity Loan into a FHA Mortgage. – FHA lenders can approve rate and term refinancing to 96.5% and many homeowners have success refinancing their first and second mortgages together into one low monthly payment with a fixed interest rate.