Obama to Unveil New Underwarter Mortgage Refi Plan
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President Barack Obama is expected to unveil a new plan Monday which will help struggling homeowners refinance underwater mortgages.
The new plan will let borrowers refinance existing mortgages regardless of how far their properties values have fallen below outstanding mortgage balances. The refinance process will be streamlined by eliminating appraisals and other underwriting requirements as well as some fees. Homeowners looking to refinance under the new plan will have to be current on their payments.
The latest effort to boost the still sagging real estate market is a revamping of the Home Affordable Refinance Program, or HARP, which has seen limited success. The old plan allowed refinancing if a borrowers first mortgage did not exceed 125 percent of the current market value of the home and the loan was owned by Fannie Mae or Freddie Mac.
If successful, the new program could allow up to one million borrowers to refinance. With interest rates so low, this could free up hundreds of dollars each month for borrowers to use on others things and potential boost economic activity.
The new plan will let borrowers refinance existing mortgages regardless of how far their properties values have fallen below outstanding mortgage balances. The refinance process will be streamlined by eliminating appraisals and other underwriting requirements as well as some fees. Homeowners looking to refinance under the new plan will have to be current on their payments.
The latest effort to boost the still sagging real estate market is a revamping of the Home Affordable Refinance Program, or HARP, which has seen limited success. The old plan allowed refinancing if a borrowers first mortgage did not exceed 125 percent of the current market value of the home and the loan was owned by Fannie Mae or Freddie Mac.
If successful, the new program could allow up to one million borrowers to refinance. With interest rates so low, this could free up hundreds of dollars each month for borrowers to use on others things and potential boost economic activity.
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