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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: RockyBalboa who wrote (122137)	5/10/2008 6:43:11 PM
From: XoFruitCake	Respond to of 306849

"-No cashout refi at > standard LTV? (pretty obvious but...) -No piggyback refi? (this is less clear. If I cashed out via a piggyback loan, and I´m current on both I would feel treated unfairly compared to a similar case just without a second mortgage). -FNM only? (is it effective then? Most who are in need of a refi and are current, have acreeting loans, or loans with teaser rates and big points tacked on the normal rate." I would take it in the first pass, the piggyback loan is not going to be included and it will be FNM only.. You must be thinking that FNM is trying to bail out everyone.. I am with Tanta on this one. It is a FNM program for FNM insured loan.. If you look at it from that angle, it is better to foreclose someone who has a 2nd mortgage and the new apprasial is lower than the first loan (if and when they foreclosed), there is no reason to bail out the 2nd mortgage by refinance the 2nd mortgage.. The interesting question is going to be the guarantee fee. My bet is that they are going to raise the fee so that the refinance is going to be lower than the reset but higher than the regular mortgage with the fee that FNM collected being the difference. The truth is that FNM does not have enough money as it to cover their own guaranteed mortgage hence the last 2 round of raising capital. And the second round that they just announced is more expensive than the first one (first time is a non-cumulative preferred for 8.25% and the one just announced is convertible preferred with 8.75%. Normally a convertible preferred should command an interest rate much lower than a straight preferred. But not here). When they raise capital again in the near future, it will be even more expensive and I don't think FNM is in the mood of taking on more questionable loan guarantee on their book.