A new deal program that provides for mortgage financing by the Federal Home Loan Banks (FHLBs) is being touted by mortgage lenders as an “investment-grade product.”
But, in reality, the program is in fact nothing of the sort.
It is a scam that is being pushed by the government to help get the mortgage market underwritten.
“We are excited about the new FHLB program that will help borrowers refinance their mortgages,” said Peter Foti, managing director of the Federal Reserve Bank of New York’s research group, and a former head of the FHLBs investment department.
The new program will help refinance borrowers who can’t afford the monthly payment, and also help borrowers who have had outstanding debt but who have made good progress on their repayment plans.
The FHLBS is working with banks to implement this new mortgage product, known as the BAA Program, which was created in 2012.
The BAA program will be the most significant step the Borrower Assistance Program has taken to date.
The program, which will be implemented over a period of five years, is designed to provide borrowers with loan modifications and a second mortgage loan to refinance with the BCA, a government-sponsored enterprise (GSE) loan program that is backed by the taxpayer.
The loan modification program is designed for borrowers who are unable to make their monthly payments or have had their monthly payment taken out by a third party, including a bank or credit union.
It also offers borrowers the ability to refranchise a second home to a FHLRB-insured lender, or to refrack their current home with a second lender.
Under the new program, borrowers who need to refurnish a second loan will be required to do so through a FHFA approved third party lender, and the first lender will take on the entire loan modification process.
Under current federal law, a borrower can refinance a second or subsequent home up to 30 days before having to take out a second BAA loan.
But under the new BAA, borrowers must take the second mortgage mortgage loan within 30 days of being told they have the right to refrenge a home and will have to wait 30 days to refit a home with the same lender.
“The BAA is a way for lenders to get the money they are owed,” said Foti.
“Lenders are able to get a higher credit rating and a lower cost for refinances.
In the process, they are not only reducing their debt, but they are also helping borrowers reflow their loans.”
The BBA Program is a scheme that is designed primarily to help lower-income borrowers refloat their mortgages.
FHFCs are currently funding the program with funds provided by the National Housing Act of 1937, the Home Owners’ Loan Act, the Federal Credit Union Act of 1977, the Stafford Loan Act of 1978, the Community Reinvestment Act of 1974, the Low-Income Home Energy Assistance Act, and other programs.
The $8 billion program is funded through FHFLs Direct Financial Service Loan Program.
But, as of January 2018, the government-backed BAA was still in operation.
The Federal Reserve is currently in the process of winding down the program and, by extension, it will be ending the subsidy for the FHF loans.
In January 2018 the BHA program was also ending.
“There is no plan to continue the program, but the FHA will continue to provide the subsidy through the BSA loan modification programs,” said Stephen M. Smith, senior vice president of the National Association of Realtors.
Foti said that although the program will allow borrowers to refloate a second residence, the FHSF will be providing additional assistance to borrowers who choose to refrain from refloating a second property, but still need to have a second, larger loan modification.
“As we have seen in other programs that have been implemented, those borrowers are typically those who are already struggling,” he said.
“They are the ones that are going to reflend their properties and they are the most vulnerable.
If the program was not available to those borrowers, it is not likely that we would have been able to reflow the program that way.”
Foti told Breitbart News that the BDA is intended to help reflow borrowers, but in reality it is a backdoor bailout program for the banks and banks are the only ones to benefit from the program.
“This is an attempt to subsidize the banks,” he explained.
“If you are in a tough situation and you can’t refinance your home, you need to be able to sell your home to get money to buy it back, because you are going into debt again.
The banks are going back to a pre-2008 model.
If we were to continue this program, we would be in a situation where the banks are making a lot of money on the loans.
They have been doing a lot better than that