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Bank Finds Business in Denied Refis

Bank Finds Business in Denied RefisIndependent Bank expects to revive $20 million in denied refis

March 9, 2009

By staff

A 144-year-old Michigan bank expects to revive as much as $20 million in previously denied loans as a result of the new mortgage plan.Details of The Home Affordable Refinance program were announced last week by the U.S. Department of the Treasury. The program is part of the Homeowner Affordability and Stability Plan originally announced by the Treasury last month.

Under the program, borrowers on loans owned by Fannie Mae and Freddie Mac can refinance at high loan-to-values without obtaining new mortgage insurance policies. It is expected to help between 4 million and 5 million borrowers with LTVs from 80 percent to 105 percent refinance at today’s lower mortgage rates.

Independent Bank Corp. said it would immediately implement the program.

A review of its refinances that had been turned down over the past few months indicated that around $15 million to $20 million in previously denied mortgages could be refinanced under the new program, according to an announcement today from Independent — which was originally founded in 1864.

“Many aspects of the proposed plan mirror the actions we’ve taken at Independent Bank over the past year to assist our customers with loan modifications during these challenging economic times,” Michael M. Magee, chief executive officer of the $3 billion Ionia, Mich.-based bank, said in the announcement.

In December, Independent received $72 million from the capital purchase plan as part of the Troubled Asset Relief Program.

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