Antonio Cibella:I'm a man of the people! No appraisals it is! Let's just pay off everyone's mortgage anyway, 900 billion has to go pretty far. Why not pay them all off with this government windfall that we've printed up! We'll all just pay for it in taxes anyway. ..... Wait a second, that sounds strikingly similar to this thing I learned about in 7th grade, socialism. Very interesting.
Appraised value is the main problem I see in the refi market. Why not change the FHA rule and allow any non-freddie and non-fannie loan to go streamline FHA: no income, no asset and no appraisal. Then folks who are upside down but has made the mortgage payment on time can refi and get a rate in mid 5's. Since the loans are guarenteed by the federal government investors should buy them.
Also if a person has made his payments at a higher rate on time for the last 2 or 3 years and is in the same type of employment then let him refi and take advantage of rates in the mid 5's regardless of whether or not he can prove his income..
So what if the person took a stated income loan, if they are making the payments on time who cares. Waive the income requirement, let them refi and get a lower payment so they can better afford the home.
By listening to the feds you would think that foreclosures are caused by the stated products or the toxic pay options; in reality a large majority of home owners want to Refi to get out of that arm or Refi before the arm resets but alas they can not because the property value is not there. So, most homeowners are walking away from the home. Not primarily because of the drop in home value but because of their inability to Refi; People want to stay in their homes.