Obama Announces New Program to Ease Financial Burden on Homeowners

October 25 00:00 2011

New York, October 25 (RainbowNewsLine.com) – The Obama administration has announced that it will launch a new program to ease the burden on some struggling homeowners to refinance underwater mortgages at today’s low interest rates. The program will allow homeowners refinance irrespective of how far their homes have fallen in value, eliminating earlier limits. The refinance process will be streamlined with the elimination of appraisals and extensive underwriting requirements as long as the homeowners are current on their mortgage payments.

Obama said that “This will help a lot more homeowners refinance at lower rates,” and added that he would do “everything in my power to help stabilize the housing market.”

Underwater homeowners who qualify will benefit with today’s bargain-basement interest rates, which are around 4 percent. Refinancing will help all those who are stuck with much higher interest rates with savings of several hundred dollars a month. Mark Zandi, chief economist at Moody’s Analytics said that the expanded plan “is a small but meaningful step forward, particularly for the more hard-pressed areas of the country,”

However, not all homeowners will qualify because the loans must be backed by Freddie Mac or Fannie Mae and must not have been acquired by them before May 31, 2009. Credit history and income generally will not be checked but homeowners must have been current on their last six payments and not have been late on more than one payment in the prior 12 months. Full details of the program will not be released until November 15.