New Mortgage Loan Program - 105% Loan To Value????

According to information received by this Post, two National Mortgage Lenders, Countrywide, owned and controlled by Bank of America, and Metlife Home Loans, a new mortgage loan refinance program called the Fannie Mae Refi Plus program commenced yesterday.

As its name indicates, this program is only for mortgage refinances of currently owned homes, and available to all homeowners under the recently passed American Recovery and Reinvestment Act of 2009. Availability, however, remains subject to certain conditions, which I will reveal shortly - the good news first, okay?

What is positive (if it could be viewed that way) is that Loan To Value ratios of up to 105% is allowed. Aside from owner-occupied homes, second homes and investment properties are also acceptable. Existing second liens are okay, if subjugated and Credit scores as low as 580 will be considered. For certain Counties around the nation, the conforming limit is set at $729,750 - more on this last in a bit.

Original First Mortgage Loans with a loan to value greater that 80% and those with Mortgage Insurance (MI), will not be considered, not at this time, anyway. Consolidation of a second lien into the new loan is also not allowed, neither are loans with new subordinate financing. Other ineligible loans are Balloon Mortgages, Interest Only Programs and Reverse Mortgages. It appears that the Mortgage Lender will also be developing their own criterion in addition to what the Treasury Departments' program calls for.

The program is not final at this time. The program will be expanded and undergo additional changes to facilitate more refinance options in keeping with the goals of the Home Affordability Refinance Initiative released earlier this year on March 4, 2009.

The Conforming limits is the new limit of $729,750 set by Congress earlier this year under the American Recovery and Reinvestment Act of 2009. However, loans acquired in 2009, but originated prior to July 1st 2007, will remain subject to the previously announced 2009 loan limits - Refer to our post of 03/25/2009. These limits were set under the provisions of the Housing and Economic Recovery Act of 2008.