Obama Urges Mortgage Refi Plan for ‘Responsible Homeowners’

The Obama administration will propose legislation to allow millions of homeowners to refinance at the current, historically low interest rates, and move them into mortgages guaranteed by the Federal Housing Administration.
The program is meant to help borrowers who may be “underwater” on the loans, owing more than the value of their homes, and who have been making their payments on time.
It also targets those borrowers whose loans are held by private companies and are not currently subject to refinancing opportunities.
Existing refinancing programs only assist borrowers whose loans are owned by government-operated entities, Fannie Mae and Freddie Mac. Other than a mention during last night’s state of the union address, the Obama administration has yet to release more details of the proposed legislation.
The plan would require Congressional approval; however, some Republicans may support expanded refinancing programs, even in the politically divisive current atmosphere.
“… Responsible homeowners shouldn’t have to sit and wait for the housing market to hit bottom to get some relief,” Obama said in his state of the union address. “And that’s why I’m sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low rates.  No more red tape.  No more runaround from the banks.”
Obama said “a small fee on the largest financial institutions” would ensure that the refinancing program won’t add to the U.S. deficit and will give those banks that were bailed out by taxpayers “a chance to repay a deficit of trust.”
The proposed program would target up to 3 million homeowners and is not necessarily targeting those borrowers who are facing foreclosure – but those who are making their mortgage payments on time. Their extra cash from refinancing would bolster the economy, Obama administration officials say.

4 thoughts on “Obama Urges Mortgage Refi Plan for ‘Responsible Homeowners’

  • January 25, 2012 at 4:34 pm

    Sign me up
    Bob Balsley

  • January 26, 2012 at 5:57 pm

    I have recently tried to research how many homeowners have loans that are not backed by Fannie/Freddie and came up with really no information. Have many of these homeowners tried/inquired to refinance their mortgages but are unable to because they don’t qualify for HARP? Refinancing into an FHA loan (if you qualify) your adding in MIP (mortgage insurance premium) which in most cases there is really no relief to the mortgage payment not to mention your stuck with the MIP for 5 years. I feel most underwater homes won’t even be close to reaching 78% LTV (loan to value) within 5 years. So how many of these homeowners are out there? Is this number significant and if so will these homeowners who cannot refinance have an impact on the recovery?

  • February 3, 2012 at 4:44 pm

    My job has reduced my pay and forced employees to take a week off between Christmas and New Years for the last two years. I have tried to refinance our underwater conventional jumbo loan, owned by Wells Fargo and serviced by Bank of America. I have called BofA several times trying to refinance. The first time I called, I was told that we are underwater too much to qualify for HAMP and our mortgage to gross pay ratio is under the 31%. I called again when the HAMP program was changed, removing the underwater cap and was told we don’t qualify because we have a conventional jumbo loan. Just got off the phone with BofA to try and work out an interest reduction to lower our payments and was told that they could only do the HAMP and a regular refy (I would have to put $100k+ down to compensate for our home being underwater). This is VERY frustrating that there is no program that we could qualify for!!!! We are still making our payments, but have many other debts as well as normal everyday expenses. We have no emergency fund and very little savings ($400). Our water bill has doubled with the new ‘tiered’ rate and our electricity has increased significantly for the same reasons. All I am asking for is to lower the interest, so our payment is reduced. I am not asking for a forgiveness in mortgage amount.

  • February 7, 2012 at 3:24 pm

    I have been trying to refinance for 2 years and there has been no HOPE for this homeowner. We aren’t Freddie/Fannie or FHA and HORROR……have never been late on a payment, so there are no programs for us. Make JUST too much to modify and the darn second mortgage (which is the main reason we need to refinance) is a HUGE issue for anyone that has even given me the time of day. A program that would actually help those of us who are responsible who just want a rate reduction would be great. I am not asking for (nor do i really want) any reduction on what I owe, just the interest and of course combine the first and second into one. This would be great if the politicians could actually stop fighting long enough to work for the people for a change!

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