Obama Expands Loan-to-Value Ratio to 125% for Refinance Program

[cobra de capell]

Obama Expands Loan-to-Value Ratio to 125% for Refinance Program

http://www.examiner.com/x-13480-Phoe...25-loantovalue

Today the US Treasury Department announced an update to allow refinancing of mortgages backed by Fannie Mae and Freddie Mac up to a first lein position of 125% of the home’s appraisal value. This is a level that was previously set at 105% loan to value.

I cannot image going for a 125% loan to value. Our Federal Government must run a really more than passingly strange set of books.

[FWB]

Originally Posted by cobra de capell

Obama Expands Loan-to-Value Ratio to 125% for Refinance Program

http://www.examiner.com/x-13480-Phoenix-Real-Estate-Examiner~y2009m7d1-FannieMae-and-Freddie-Mac-Refinances-up-to-125-loantovalue

Today the US Treasury Department announced an update to allow refinancing of mortgages backed by Fannie Mae and Freddie Mac up to a first lein position of 125% of the home’s appraisal value. This is a level that was previously set at 105% loan to value.

I cannot image going for a 125% loan to value. Our Federal Government must run a really more than passingly strange set of books.

where else but gov't can you be trillions in debt and not go belly up.

[cobra de capell]

One has to wonder if America has not turned into a house of cards.

[Wayne Maybury]

Originally Posted by FWB

where else but gov't can you be trillions in debt and not go belly up.

Or who else can keep on borrowing more to pay off existing debts, on an on-going basis? Sadly, there does not appear to be any sort of viable debt exit strategy.

[cobra de capell]

Originally Posted by Wayne Maybury

Or who else can keep on borrowing more to pay off existing debts, on an on-going basis? Sadly, there does not appear to be any sort of viable debt exit strategy.

Actually, there does appear to be a strategy - if the owner and the lender think that prices will go up, both are willing to enter into a 125% of value contract - sound familiar?

Here's the interesting thing - what if the owner needs to sell - say in one year due to a job relocation or loss? No one will buy for the mortgage balance, so our Uncle Sam will have to take it in the shorts and the resulting poop will be all over us for year and years. It will take 10 years of more for housing prices to go up, especially in the high impact areas.