Surprise! It's a Bailout for Vacation Homes, Too - WASHINGTON POST online Mar. 6
I'm shocked that people aren't jumping all over the revelation that the no-equity mortgage refinance program unveiled
yesterday is going to be available for vacation homes and one-to-four unit rental properties as well as for
owner-occupied homes. The Post's Renae Merle reported this detail, which she found in the program rules published by
Fannie Mae and Freddie Mac.
The refinances are available to borrowers who bought their properties using Fannie or Freddie loans and who are not
behind on their payments, but who don't have enough equity to qualify for an ordinary refinance. It's half of a two-part
homeowner bailout program. The other half encourages loan modifications that can reduce interest rates and payments
for borrowers already in default or near foreclosure. That loan-modification plan is restricted to a borrower's primary
residence.
But President Obama never made such a distinction when he first announced the broad outline of his plan last month.
"The plan I'm announcing focuses on rescuing families who have played by the rules and acted responsibly, by
refinancing loans for millions of families in traditional mortgages who are underwater or close to it," Obama was quoted
as saying in a Feb. 18 Post story. Perhaps we should have read "close to it," as "close to the water" instead of as "close
to underwater."
Then again, a foreclosure prevented is a foreclosure prevented. But a bailout for vacation-home owners and small
investors is something I simply did not expect to see.
I'm shocked that people aren't jumping all over the revelation that the no-equity mortgage refinance program unveiled
yesterday is going to be available for vacation homes and one-to-four unit rental properties as well as for
owner-occupied homes. The Post's Renae Merle reported this detail, which she found in the program rules published by
Fannie Mae and Freddie Mac.
The refinances are available to borrowers who bought their properties using Fannie or Freddie loans and who are not
behind on their payments, but who don't have enough equity to qualify for an ordinary refinance. It's half of a two-part
homeowner bailout program. The other half encourages loan modifications that can reduce interest rates and payments
for borrowers already in default or near foreclosure. That loan-modification plan is restricted to a borrower's primary
residence.
But President Obama never made such a distinction when he first announced the broad outline of his plan last month.
"The plan I'm announcing focuses on rescuing families who have played by the rules and acted responsibly, by
refinancing loans for millions of families in traditional mortgages who are underwater or close to it," Obama was quoted
as saying in a Feb. 18 Post story. Perhaps we should have read "close to it," as "close to the water" instead of as "close
to underwater."
Then again, a foreclosure prevented is a foreclosure prevented. But a bailout for vacation-home owners and small
investors is something I simply did not expect to see.
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