Is there really hope in the Hope for Homeowners Act?

Even with the Fed lowering their rate to 2%, interest on fixed rate mortgages has steadily risen. The relief is slow in coming and with borrowers desperate for any improvement however slight, the deck is stacked against them. There are so many trying to refinance away from their adjustable rate mortgages that they are accepting a bludgeoning because they have little or no choice. The investors, once burned are twice shy about lending. We all know from experience that lenders will charge as much as they can, because they can. Rates for fixed rate mortgages rose 3/8% in the last week.

Mortgage insurance is required when borrowers have less than 80% equity in their home. Premiums for mortgage insurance have nearly tripled. Borrowers were trying to avoid paying PMI when premiums were at .5%. It is a very significant part of their mortgage payment now because premiums are at 1.5%. Property values declined significantly in many areas. Equity has been lost and PMI may be required now if the property is refinanced. Even if it wasnÂ’t required when the earlier mortgage was initiated.

It will probably be an endeavor in futility. My mortgage from 1996 has finally crossed the threshold and calculates to 80.04% equity based on the purchase price offset by my down payment and nearly 13 years of payments. Yes I will apply for PMI to be eliminated. It should not be necessary for me to make the calculations and make that petition, but I will do so.

The mortgage was recently transferred to another mortgage company. I suspect the new handler will attempt to overlook the issue and continue to charge me for PMI. Possibly the recent status has been noted and that is why the mortgage changed hands. The new mortgage company may be aware of the status and the drop in premiums will be handled as a matter of course.

When my mortgage was initiated, PMI was roughly .3%. The monthly premiums were about $19. At current rates for new mortgages, PMI would be closer to $95 per month for the same mortgage.