Obama Refinance Homes Today's Interest Rates - Government ...

Posted on September 9, 2011

In last night?s job speech President Obama pledged assistance to millions of American homeowners that are trapped in a high interest rate mortgage and can?t refinance there home either due to weak credit or not having enough equity in there home. ?This is certainly a step in the right direction, but is it to little to late for millions of American?s facing foreclosure?

President Obama Said:

And to help responsible homeowners, we?re going to work with federal housing agencies to help more people refinance their mortgages at interest rates that are now near 4 percent. That?s a step, I know you guys must be for this, because that?s a step that can put more than $2,000 a year in a family?s pocket, and give a lift to an economy still burdened by the drop in housing prices.

The government released a white paper on Wednesday titled ?An Evaluation of Large-Scale Mortgage Refinancing Programs??outlining the issues facing homeowners and how this new program may work, you can download that white paper here. ?Following is an excerpt from the white paper.

The ongoing housing crisis and the slow recovery from the recent recession have locked many borrowers out of the refinancing market. Two main factors drive that phenomenon:

• Weakened household balance sheets, reduced income and widespread unemployment have left many borrowers unable to qualify for a refinancing because of restrictions based on affordability tests. For some the constraint is a too high loan-to-value (LTV) ratio?the amount of mortgage debt divided by the assessed value of the home.1
• Lenders and mortgage guarantors, including the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac and the Federal Housing Administration (FHA), have instituted more stringent underwriting requirements, leaving many borrowers unable to qualify for a new loan even if they have remained current on their existing mortgages.

With those rates now near 4 percent, the president says the move could ?put more than $2,000 a year in a family?s pocket, and give a lift to an economy still burdened by the drop in housing prices.?

While the specifics have not been released, it?s expected that the program will make homeowners with government-backed mortgages eligible for new, lower-rate, lower-payment loans even if they are upside down on their mortgage or have have negative credit due to not making mortgage payments on time or excessive debt to income ratio.

Tags:?Obama Refinance Homes Today?s Interest Rates, Government Refinance Loans Program for Bad Credit

Source: http://www.360dwellings.com/obama-wants-to-refinance-millions-of-mortgages-at-todays-ridiculously-low-rates/

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