Ahead of the midterms, the White House is dangling a carrot. If these ideas are actually put in place, and not just floated, they could change the landscape for buyers and homeowners looking to refinance.

What’s being proposed:

• Lower rates on VA and USDA loans.
• Proactive mortgage insurance cancellation. Lenders would notify borrowers when they’re eligible to drop mortgage insurance, so they don’t keep paying it longer than they need to.
• Fewer hoops. Cutting unnecessary paperwork, appraisal costs and other barriers.
• Reducing or eliminating LLPAs (Loan-Level Price Adjustments). Fannie Mae and Freddie Mac added these fees in 2008 to price loans by risk, such as credit score and down payment. They hit first-time buyers especially hard, so this one could make a big difference.
• Easier rate-and-term refinances. Waiving appraisals, income re-verification and other documentation.
• Lower title insurance costs on refinances. If you already paid for title insurance when you bought, why pay full price again every time you refinance?

My take: Regardless of motivation ie politics, our industry is overburdened by regulations, nit picky guideline requirements and in general a cumbersome process that just does not need to be this difficult.

Let’s see if any of this actually happens.

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