Orlando Mortgage Blog

First, a little background before the condo good news.

If you have owned property in the state of Florida (every state really) since the 2008 crash then you probably already know what happened to real estate values in the last 5 years. If you bought your home before the bubble, you may or may not have realized the pain the huge drop in real estate values brought and therefore loss of equity dependent on when you bought it and/or whether you placed additional financing on it such as a standard second mortgage or home equity loan also known as a HELOC. Many folks that purchased in the year or two before or after the bubble burst found that their values seriously declined in the years since, until the most recent year.

Old news you say and I agree. But, it was more involved than that of course. Unemployment or underemployment worsened the pain and many across the country found themselves unable to make the payments or able to relocate if they couldn't sell the white elephant. But it got worse. In years past an owner might simply refinance or sell the property to reduce their expense picture in the meantime while the economy improved. But when you find yourself upside down on equity due to the large drops in property values many found they couldn't sell or would have to actually bring money to closing to do so. Worse, these same folks found that they couldn't refinance into a lower rate, payment or longer term to allow some breathing room also because they now could not meet the loan-to-value (LTV) ratio requirements and suddenly they were stuck without any options short of putting the keys in the mail box and walking away.  D.C. came out with loan modification programs that failed miserably with many lenders doing little to get them set up. They still are not meeting those needs to any great extent.

Next comes several extensions and versions of the federal HARP refinance program specifically to allow refinancing of mortgages currently owned by Fannie Mae and Freddie Mac for those folks who found themselves unable to refinance to take advantage of the new lower rates, longer terms  and so on. We offer the latest version for those property owners whose mortgage is owned by Fannie Mae (FNMA) the largest holder and whose mortgage was purchased or guaranteed by FNMA prior to June 1, 2009. It's called the FNMA DU Refi Plus program. There are many advantages that you can review specifically and determine if your mortgage is eligible by clicking on the HARP Refinance button in the left column.

Now, I really want to speak to the condo owner's out there about this program in today's blog comment. Condominium (condo) owners have been particularly impacted because, of the various property types, condos have had one of the worst track records of problems during this time frame. Very high foreclosures overall by property type and many issues such as association dues shortages that may have driven increased deferred maintenance issues, brought on by vacant units that were walked away from by owners who couldn't sell or refinance forced underwriting standards to be clamped down on severely. Many owners found that the only viable alternative was the Fannie or Freddie limited condo program that limited LTV's to 75% of the fair market value maximum unless the condo project was FNMA or Freddie approved and that generally only happens on new projects during the construction and sellout period. With falling values and the 75% cap many have been in a corner for a number of years. And forget it if it's an investor unit.

Short and sweet (finally) the FNMA DU Refi Plus program allows condominiums to be refinanced at maximum LTV's determined by the FNMA DU Refi Plus system. In other words there are no predetermined hard an fast LTV caps other than what FNMA determines. It could be 85%, 100% 150% or higher dependent of the response given by FNMA. Also, current standard conventional guidelines do not allow investor condo properties at all and many lenders do not allow second homes either. This program does without having to meet the standard "Limited Condo Review" guidelines, only one of which is the 75% LTV limitation. Resort condos, condotels, co-ops, and manufactured homes are not eligible.  

So if you own a condo check out the HARP Refinance button on the left. This can be the answer to your problems today. Even though rates have bumped up slightly of late, many can now take advantage of a lower rate or longer fixed rate term which can mean more to lowering your payment than a rate.

Bill Wilbanks