We here at Bayside, get many requests from people who want to refi for the Florida mortgage rates that they hear on the news but their houses have diminished in value so far, that they can’t do it.

FHA loans have what is called a “streamlined” refinance.  That is, you can refinance your FHA loan without an appraisal or even income or credit documents if you can show that you are benefiting.  There is no cash out permitted and you are not allowed to go over what the original loan was.  Well the big news today is that this same program may be used for conventional Fannie and Freddie Florida mortgage loans.  Is this a good thing?  I think it is.  I mean - a guy buys a house for $100,000 and has an $80,000 loan.  Now his house is worth $75,000 and he has no chance of refinancing.  If he was allowed a new $80,000 loan at a much lower interest rate, he would be more inclined to stay in the house, keep paying taxes and not let his house go to rot.  I mean, Fannie and Freddie are no worse off right?  But they could be if the house goes into foreclosure and they lose the income stream for a year.  Under the limited use of a “no cash out” loans - this could be a very good thing for a lot of homeowners.

Only in the conversation stages but you Florida mortgage holders, stay tuned!