Loan modification vs refi

When the bailout cheerleaders mention every available tool they are not kidding.  Why not let the homeowners appraise their own property. 

Solution for no doc loans - how about - self appraisal refis?


GSEs Look to Follow FHA’s Lead on Streamlined Refis : HousingWire || financial news for the mortgage market

In particular, the GSEs are considering a plan to allow some borrowers to refinance without the use of an updated appraisal.

“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, according to a Bloomberg report. “That’s an issue that’s being discussed. They’re looking at it.”

The same Bloomberg report managed to find analysts, such as Paul Miller at FBR Capital Markets, in a lather over the proposed changes, calling it a “disaster.” Josh Rosner at Graham Fisher & Co. also jumped on the overreaction bandwagon, too. “To refinance loans without any concern for collateral value suggests a world in which no lender would ever hold a loan they refied and no investor would ever buy, unless it carried an explicit federal guarantee,” he told the news service.

Every one of them is missing the point here.

The U.S. Department of Housing and Urban Development has permitted so-called “streamlined refis” without appraisals on FHA loans since the early 1980s, according to a department Web page. It’s a program limited, however, to rate and term refis — no cash-out refis here — and borrowers must be current on their loan. The VA has a similar program.

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