Many mortgage professionals have been anxious to take advantage of today's historically low rates. I personally have encountered tremendous frustration stemming from lower home values combined with much tighter underwriting guidelines. This tough mix has restricted refinancing to those who, unfortunately, probably need it the least.

Those anxiously awaiting some aid from Washington will be happy to find that the refinancing element of the Recovery Initiative allows for rate and term refinances to 105% loan to value. In order to qualify, loans must be currently guaranteed by Fannie Mae or Freddie Mac, be in good credit standing, and meet present "qualifying guidelines".

Like all new things however, there are still a few unknowns in the mix. For example, it remains unclear how second mortgages will play into the picture. In order for these refinances to go through under this plan, holders of second mortgages in many cases may have to agree to subordinate. Since the LTV limit of 105% on the new first mortgage does not account for amounts owed on second mortgages, holders of second mortgages may get nervous in situations where the combined LTV of both mortgages is say, 125% of the value.

More to come...