U.S. May Back Refinance Plan for Mortgages

The Obama administration is considering further actions to strengthen the housing market, but the bar is high: plans must help a broad swath of homeowners, stimulate the economy and cost next to nothing.

One proposal would allow millions of homeowners with government-backed mortgages to refinance them at today’s lower interest rates, about 4 percent, according to two people briefed on the administration’s discussions who asked not to be identified because they were not allowed to talk about the information.

A wave of refinancing could be a strong stimulus to the economy, because it would lower consumers’ mortgage bills right away and allow them to spend elsewhere. But such a sweeping change could face opposition from the regulator who oversees Fannie Mae and Freddie Mac, and from investors in government-backed mortgage bonds.

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Posted in * Economics, Politics, Consumer/consumer spending, Economy, Housing/Real Estate Market, Office of the President, Politics in General, President Barack Obama, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The U.S. Government

7 comments on “U.S. May Back Refinance Plan for Mortgages

  1. AnglicanFirst says:

    How is this going to resolve issues of home owner incompetency or home owner inability to meet the continuing cash flow burdens of home ownership or homeowners who ‘bought a Lincoln’ when they should have ‘bought a sub-compact car,’ etc.?

  2. centexn says:

    Million dollar question.

  3. Creedal Episcopalian says:

    This is exactly what precipitated our current mess in the first place. What are they smoking at the white house?

  4. Capt. Father Warren says:

    [i]A wave of refinancing could be a strong stimulus to the economy[/i]

    How? For appraisers? For loan agents? Title insurance agents? If there is so much gold out there to be had then why aren’t all these prospective folks refinancing today? Another thing one doesn’t have to wait around for the Government to do.

    People if you want to refinance, you can do it yourself!!!

    Another clear case for the pending death of “Individual American Ruggedness”

  5. Adam 12 says:

    A problem with refinancing is that houses often aren’t worth what the mortgage is for, hence there is a problem with the house being used as collateral.

  6. Capt. Father Warren says:

    [i]A problem with refinancing is that houses often aren’t worth what the mortgage is for[/i]

    Thank you #5 because you just pinned the tail on the donkey (no pun intended). This will just be another redistribute the wealth scheme; taking more money out of the productive sector to throw it over the fence to the non-productive sector. Followed by all kinds of hand wringing about how the economy just isn’t getting that much better and nobody can seem to figure out why.

    Go check out the stats on the earlier Obama mortgage-modification program. Very few people ended up getting help in that program. For real grins go check out the “make low income homes energy efficient program”, after hundreds of millions of dollars, scant evidence that any homes were actually improved or that many, or any of the supposed contractors had any idea how to do it.

    And the folks who have done such a miserable job spending YOUR money are getting ready to gin up the sales machine to get you excited about another “jobs program”. Focusing like a laser on ideology, not jobs.

  7. Clueless says:

    Also, what needs to happen is not a longer loan, but debt forgiveness. Right now people have big loans but are able to mail in their keys and walk away. They can’t do this with student debt or credit card debt or medical debt for which their salaries and social security will be garnished for the rest of their lives.

    This program is another program to benefit the banks. It turns homes that were bought for 300,000 and are worth 90,000 into loans that pay interest for 50 years. This is what the Japanese did, only they allowed kids to pick up the loans for their parents, enslaving another generation.

    The banks wrote loans they could not afford. Those loans need to go into default, the unemployed “homeowners” need to move to a different state where there are jobs, and double up with 3 people until they are back on their feet. The pension plans that stuffed themselves on “secure” fannie and freddie bonds need to go bust.

    Another means of debt enslavement.