CNC Mortgage Blog

By Carlos Gutiérrez

A little more information is becoming available to define how homeowners can benefit from the refinancing legislation coming out of the government.

We still don’t have clear guidelines from our lenders as to how mortgage brokers will be involved in the loans that will be refinanced with the new government refinance program.

The lenders with whom we do business are drawing up the conditions that we will abide by.

I think this is how this will work:

1. The customer should call their servicer (whoever is sending them monthly mortgage bills) to find out if their loan is currently held by Fannie Mae or Freddie Mac. If the loan is held by them, you might be eligible to refinance.
2. If you have a second mortgage on your property call the servicer to find out if they would be willing to subordinate the loan if you refinance the first mortgage.
3. Try to estimate the value of your house.
4. If all conditions apply and your proposed loan amount is less than 105% of the value of your property we can then offer you a mortgage at the rates being offered by our regular lenders without charging mortgage insurance.
5. It is pretty clear that cash outs will not be allowed on the new mortgages. This probably means that second mortgages or home equity lines of credit taken out after the property was purchased will not be eligible. We still don’t know about second mortgages taken out to buy the property.

During the past few years the banks have reduced personnel. During a surge in refinance, such as we are experiencing now, they fill their ranks with temporary contract workers. We assume that the lenders will take advantage of all the independent mortgage brokers who can reach out into the community and channel loans to them.

Several of the banks with whom we do business do not have physical presence in Minnesota so they will be very interested in getting their network of brokers to contact possible customers.

Be patient, the horizon will be clearing soon.