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You can avoid paying PMI by doing an 80/15/5 loan.
That's not an option. It would be if I were buying a new home but not for refinancing. Fortunately, this lowers our payment so I will be able to make larger payments to get rid of PMI quickly. I never thought I'd see the day I had to pay PMI. We put 20% down on this house 18 years ago and, while we're not upside down, we don't have enough equity to avoid PMI on a re-fi. It has something to do with government regulations on refinances where there isn't 20% down. Because we don't have the 20% down (without hitting 401k's), the bank would have rejected our re-fi and left us at 6% interest. They can't because of a government mandate that they have to allow us to refinance at the lower rate, they can, however collect PMI in the process. It's just the bank ripping us off. We don't have 20% either way but we'll be paying 2.5% with PMI or 6% without. PMI is cheaper. We're also extending the loan so the payment will be a lot cheaper. We've given up on ever paying off this house so now we want the cheapest interest possible and we'll consider the payment rent.
Although, the bank is really dragging their feet on this one and we're paying off $600 a month in principal right now so who knows what we'll owe at the closing. We started this process in January and still don't have a closing date. This is getting frustrating.
Yes, president obummer....we need to do this again....it worked SO WELL the first time.
So JPM, Wells Fargo and Citigroup aren't covered by the CRA? That's odd since we had the CRA notice plastered at the Chase branch I worked at 5 years ago.
CRA doesn't require these banks to make loans to people who are not credit worthy. That's at the discretion of the lender.
That's not an option. It would be if I were buying a new home but not for refinancing. Fortunately, this lowers our payment so I will be able to make larger payments to get rid of PMI quickly. I never thought I'd see the day I had to pay PMI. We put 20% down on this house 18 years ago and, while we're not upside down, we don't have enough equity to avoid PMI on a re-fi. It has something to do with government regulations on refinances where there isn't 20% down. Because we don't have the 20% down (without hitting 401k's), the bank would have rejected our re-fi and left us at 6% interest. They can't because of a government mandate that they have to allow us to refinance at the lower rate, they can, however collect PMI in the process. It's just the bank ripping us off. We don't have 20% either way but we'll be paying 2.5% with PMI or 6% without. PMI is cheaper. We're also extending the loan so the payment will be a lot cheaper. We've given up on ever paying off this house so now we want the cheapest interest possible and we'll consider the payment rent.
Although, the bank is really dragging their feet on this one and we're paying off $600 a month in principal right now so who knows what we'll owe at the closing. We started this process in January and still don't have a closing date. This is getting frustrating.
Yes, president obummer....we need to do this again....it worked SO WELL the first time.
Sounds like you need to find another bank. I just refied my primary residence at an insanely low rate without paying PMI. Are you in a market with a lot of underwater mortgages? Maybe that's the difference?
If you want to have an adult discussion, will engage.
If you want to get snarky and insulting, "Get it?" you can have a discussion with yourself.
You bold, "The Justice Deparment is a part of the government, " Is this supposed to make the claim that I am too stupid to know it?
Why would the Justice Department even be involved?
I can only go by what the Wash. Post article STATES. "The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit,"
When the fed. gov't adopts a position and "pushes" for business to comply, they had better comply.
The Justice Deparment is a part of the government.They are being urged, not the banks. The DOJ is being urged to assure the banks they would not have to pay penalties to the government in certain cases.
GET IT?
Last edited by Finn_Jarber; 04-03-2013 at 09:42 AM..
For once I agree with the conservatives on the board - this is folly. What are they thinking? These policies may have been popular once, but everyone knows better now. Doing this makes the Democrats appear reckless, why shoot themselves in the head by doing this? They should be following the lead of countries that didn't have a mortgage crisis.
So JPM, Wells Fargo and Citigroup aren't covered by the CRA? That's odd since we had the CRA notice plastered at the Chase branch I worked at 5 years ago.
Of course they are, but you need to more carefully read the article you linked. As you do ask your self how many of the institutions they mention were under a CRA mandate.
Most of the subprime lenders and resellers were not under the CRA mandate; Lehman Brothers was not, Merrill Lynch was not, Bear Stearn was not; CountryWide was not; AIG was not.
Then you half to ask yourself, what portion of the subprime loans issued by institutions that were issued under the CRA mandate. Then look at the qualitly of those CRA loans.
There have been numerous studies of this issue. Again and again the conclusion are that the CRA subprime was only a small percentage of the subprime meltdown.
Another interesting point to consider if you read the study. Is why were the independent mortgage lenders (not under the CRA mandate) active in the markets that CRA lenders were mandated to be in.
The answer is at the time they thought it was a profitable business, because they and the rest of the mortgage market eco-system thought that they had a magical way of minimizing the risk via the the unregulated CDO market place. Which is why Credit Agencies would rate CDOs containing high risk mortgages AAA and why AIG was more then willing to write swaps (insurance) against the possible failures of the CDOs. In fact one executive at AIG proclaimed that the expected loss rate on CDO swaps was less than 1% (I think he actually said .1%).
we believe that this research should help to quell if not fully lay to rest the arguments that the CRA caused the current subprime lending boom by requiring banks to lend irresponsibly in low- and moderate-income areas. First, the data show that overall, lending to low- and moderate-income communities com - prised only a small share of total lending by CRA lenders, even during the height of subprime lending in California. Second, we find loans originated by lenders regulated under the CRA in general were significantly less likely to be in foreclosure than those originated by IMCs. This held true even after controlling for a wide variety of bor - rower and loan characteristics, including credit score, income, and whether or not the loan was higher priced. More important, we find that whether or not a loan was originated by a CRA lender within its assessment area is an even more important predictor of foreclosure. In gen - eral, loans made by CRA lenders within their assessment areas were half as likely to go into foreclosure as those made by IMCs (Table 2). While certainly not conclusive, this suggests that the CRA, and particularly its emphasis on loans made within a lender’s assessment area, helped to ensure responsible lending, even during a period of overall declines in underwriting standards.
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