GSEs Will Grant Principal Reductionn After All
In a demonstration of just how influential my blog is, on the same day that I explained why principal reduction by the GSEs would be a bad idea, the Federal Housing Finance Agency announced it was instituting a principal reduction program for seriously delinquent mortgages owned by Fannie and Freddie. Although the program doesn’t directly impact your credit union, you undoubtedly will get some phone calls from members interested in seeing if the program works for them.
According to the announcement released by the FHFA, principal reduction will generally be available to those who are 90 or more days delinquent as of March 1, 2016, with mortgages less than $250,000, and whose loan to value ratio is more than 115%.
If the program works as intended, servicers will begin offering modifications to eligible borrowers by October 15, 2016 through December 31, 2016. Here is some more information.
China Syndrome, Continued
I wasn’t able to make last night’s Capital Region chapter event, which was dedicated to a discussion of the impending CECIL accounting standards, but judging by the number of scheduled attendees, the proposal really has grabbed everyone’s attention. Regardless of what you are ultimately required to do, I would certainly be keeping my eyes on the news from China to gauge what the economy will be like six months to a year from now.
Against that backdrop, China is reporting its slowest first quarter growth this year. On the bright side, its 6.7% growth rate is actually higher than economists were predicting. Then again, some of these same economists have grumbled for years about the accuracy of China’s official economic statistics.
My Political Comment of the Morning. . .
Comes from one of my wife’s Facebook friends, who shared the saying going around that there’s only one moderate Republic in the Presidential Race and she’s running as a Democrat.
On that note, enjoy the beautiful weekend. See you Monday.