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Anna Deibert

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Reductions in Cash-Out Transactions Looking to Decrease Foreclosure Risks

Posted by Anna Deibert on Sep 4, 2019 9:07:20 AM

FHA has made a change to the Cash-Out Refinance Mortgages that went into effect September 1, 2019, reducing thmaximum LTV’s and CLTV’s from 85% to 80%. According to HUD Mortgagee Letter 2019-11sent August 1, 2019, when housing prices are on the rise, the amount of Cash-Out Refinances will soon begin to increase.

 

Studies have shown a link between increased foreclosures and homeowners having exercised a Cash-Out transaction.  As housing markets begin to decline and homeowners start to realize they have negative equity, they soon find themselves in an unfortunate situation dealing with foreclosure proceedings. 

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