Long-awaited and anticipated help in refinancing for some underwater borrowers who are current on their mortgage payments. This won't fix the economy but it will help a few million families.
UPDATE - Will Obama's latest mortgage refinance plan help you? - CBS
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Original story is below.
WASHINGTON -- President Barack Obama on Monday is due to unveil a changed mortgage refinance plan that would allow homeowners who have suffered steep price declines on their properties to get cheaper loans.
The Home Affordable Refinance Program is being changed so that any Fannie Mae or Freddie Mac guaranteed mortgage could be refinanced.
Click HERE to see if Fannie or Freddie has guaranteed your mortgage.
With house prices nationally roughly a third below their peak, there are millions of borrowers who will potentially be eligible to refinance into mortgages near record lows — the 30-year carried an interest rate of 4.11% last week — rather than the mere 894,000 borrowers who have used the program so far.
The new plan will require homeowners to be current on their payments.
According to the Federal Housing Finance Agency, the regulator for Fannie Mae and Freddie Mac, the program will lower fees, eliminate the current 125% loan-to-value ceiling, waive lender warranties and eliminate the need for property appraisals.
The plan is only for loans sold to Fannie or Freddie by May 31, 2009. The FHFA said it will provide operational details to mortgage lenders by Nov. 15.
“We know that there are many homeowners who are eligible to refinance under HARP and those are the borrowers we want to reach,” said FHFA Acting Director Edward J. DeMarco in a statement.
By the end of 2013, the FHFA’s “best estimate” is that the number of refinances doubles from current level, though it cautioned “such forward-looking projections are inherently uncertain.”
The move could have a major impact on the U.S. economy if the plan works as designed: There are $550 billion worth of mortgages that could benefit from a removal of refinancing impediments, economists at Morgan Stanley estimate.
Obama is due to announce the program in Las Vegas, which according to data compiled by RealtyTrac has the highest number of foreclosures in the country.
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