Wednesday, December 10, 2008

Report: GSEs May Waive Appraisals for Refis

by Bill McBride on 12/10/2008 06:49:00 PM

From Bloomberg: Fannie, Freddie May Waive Appraisals for Refinancings

Fannie Mae and Freddie Mac, the mortgage-finance companies seized by the U.S. government, are considering forgoing new appraisals on refinanced loans to help struggling homeowners, their regulator said.

“If they refinance someone, rather than doing a loan mod, do they need a new appraisal if they already have the credit?” Federal Housing Finance Agency Director James Lockhart told reporters after a speech in Washington today. “That’s an issue that’s being discussed. They’re looking at it.”
Update: I misread this proposal. Mort_fin notes:
I think we're only talking rate and term refi here, and only if the GSE is refi'ing a loan it already has on its books. If today I have a $100,000 loan at 6% on an $80,000 house, and tomorrow I have a $100,000 loan at 5% on the same $80,000 house, am I better off or worse off?

FHA and VA been doing this for 25 years. FHA'S streamline refinance program and VA's interest rate reduction loan program.

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