Surprise! It's a Bailout for Vacation Homes, Too
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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March 6, 2009; 6:00 AM ET
Categories: Foreclosure , Mortgages , The economy
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