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Cheat Sheet Q & A:

Topic:  Underwater with a mortgage that isn’t backed by Fannie or Freddie

Recently you were speaking about underwater refinancing and you referred to the Harp 2.0 program.  It’s my understanding to qualify for the Harp program your mortgage has to be owned by Fannie Mae or Freddie Mac.  Do you know of any refinance options for underwater consumers that have good credit, are current with their mortgage payments that have a “conventional” mortgage not government owned or backed?  It seems that this segment has been ignored…

Bottom Line:  In short – yes you have been ignored as have others in your situation.  First, who are those who have mortgages not backed by Fannie or Freddie? 

  • Those with jumbo mortgages (those that are $417,000 or more at the time of origination)
  • A small percentage of those that are under $417,000

First let’s double check your eligibility (just in case)

Here is the link to quickly check Freddie Mac:

Here is the link to check Fannie Mae:

If you home indeed isn’t backed by one of them then yes you’re in the cold right now.  But maybe not permanently.  An effort to introduce a HARP 3.0 program for those in your situation, on time with payments but underwater with a non Fannie or Freddie back loan would be able to refi without limits.  Here is a website that explains how you can get involved in the effort to advocate for this program (including a petition):

It’s my belief that there is a least a 50 – 50 chance of it passing this year. 

If you have a topic or question you’d like me to address email me:


So many fewer people underwater on mortgages:

Bottom Line:  Staying with the underwater housing theme for a moment…  This is a happier story.  If you think you’re underwater on your mortgage, you may seek a second opinion.  For many former underwater homeowners – there is much better news.

We’re about 17 months into the housing recovery.  While we’ve seen gains as high as 28% year over year locally, the average increase nationally has been just over 9%.  The impact, along with another year of payments that include some principal reduction, is that 41% of homeowners who were underwater just a year ago no longer are today.  That dramatic improvement should have positive follow through consequences in the 2nd half of this year. 

Many who find that they are no longer are underwater decide to commit money to their home they weren’t interested in doing when they perceived it to potentially putting good money after bad.  That should be good news for home improvement stores, home renovation contractors, etc.  But others may want more.

We typically own a home for 5 to 7 years.  We are currently back to about 2003 pricing in housing.  Many potential move up buyers have felt trapped in their existing homes for longer than they would prefer.  So with 4 in 10 no longer underwater, they become strong candidates to move up buy.  Additionally many don’t even know they aren’t underwater any longer.  With sites like Zillow often reflecting lower values than current market rates, there is likely to be a bit of a delayed reaction that plays out throughout the remainder of 2013.


TSA precheck coming to a boarding pass near you:

Bottom Line:  So late in 2011 a new expedited TSA screening process was announced for frequent travelers.  It was/is called TSA precheck.  TSA precheck would allow those deemed to be worthy of expedited screening to go to specific lines at participating airports to aid the speed of TSA screening generally.  There has been one big problem with the precheck process…  Those who were eligible often weren’t aware. 

Starting this week boarding passes from Delta, United, Continental and US Airways will include TSA precheck on the pass itself so you can see if you’re eligible.  If you are you can go to the designated security line in the airport.


Warren Buffet says bonds are a terrible investment:

Bottom Line:  It’s highly unusual for Warren Buffet to offer specific investment advice.  The Oracle of Omaha is keenly aware that what he says can move markets and affect the investment decisions of many and he hasn’t taken that knowledge for granted.  That’s why his comments to CNBC regarding the bond market made waves yesterday.

Warren Buffet, who does generally prefer equity (stock) investments to the bond market, stated that the bond market is a terrible place to invest money right now.  He stated that the Federal Reserves actions to infuse $85 billion into bonds monthly has created a terrible value to potential bond investors.  He also stated that the mindset that people should have certain percentages of portfolios in bonds is old thinking and shouldn’t apply to all people.


You Tube set to launch paid subscriptions this week: 

Bottom Line:  It was only a matter of time before YouTube added subscription based fees to some of its premium content.  That time will likely be this week.  YouTube has been creating channels, some of which feature uniquely created content and others content they’ve purchased distribution rights to.  Starting sometime soon the premium channels will be subscription based.  Each channel that you’d like to view will carry a $1.99 fee per month to view. 

The new YouTube approach will take a Netflix like subscription model and make it even more of an a la carte type service.


More people investing on their own than before the Great Recession:

Bottom Line:  I’m always encouraged to hear that there are more people taking an active interest in investing and learning more about money management.  With that in mind I was pleasantly surprised when I discovered that there are more people self-investing today than before the Great Recession. 

In 2005, 37% of investors went at it alone.  Today that figure is up to 46%.  Perhaps the many investment advisors that didn’t protect their clients from the darkest days were parted with.  Perhaps it’s the addition of investment vehicles likes ETF’s that make it easier to target baskets of stocks rather than individual companies.  In any case I’m happy to see it.  Keep on investing…