The President's Slam Dunk Pt. 1

Look for the President to announce next Thursday his “Grand Re-Fi – Save the Housing Market-Hail Mary”. I’ll attempt to keep this as simple as possible. It could get REAL technical.

 

I follow Bruce Kransting’s Blog. Bruce is usually right on the money. We’ve heard rumblings about some kind of refi program in the works from the fed’s. Mr. Kransting has taken different statements from the fed’s. over the last 2 days that could only lead one to think this will be part of the President’s “New Deal 2”.

 

You might want to pour an adult beverage. Here goes….

 

Look for a program that would allow ANY Fannie/Freddie backed mortgage loan, that is “Underwater” and Current to be re-financed, no underwriting, no appraisal  and no closing costs. Yes, you read this correctly. This applies to only SF owner occupied properties.

 

The consensus seems to be a fixed rate of 4% . I don’t see how you could go lower but, wonders never cease.

 

We’re talking BIG NUMBERS of interest savings. To the tune of $1.3 Trillion. 

Let me do some “cocktail napkin” figures : (I promise to keep it simple)

 Number of F/F mortgages Underwater = 26% +/-  (Core Logic) 

Fannie’s Loan Portfolio = $3.1 Trillion  ( ) 7/11

 

Freddie’s Loan Portfolio = $2.1 Trillion  (  ) 7/11

 

Interest Rate Savings @ 4% = $1.32 Trillion

 

Now, You Tell Me… Who could be Against This Deal ???

  

The President can say; Look what I’m doing for you. I’m cutting your mortgage payment AND putting $1.3 Trillion back into the economy. I mean what’s not to like?? All the Underwater Folks are going to love the deal. Everyone likes FREE MONEY.

 

PART 2 : The Details or “No Sweat” This Will Work