President to Offer Way for Easing Home Debt

[alp227]

The White House plans to propose legislation that could allow a few million homeowners to reduce monthly mortgage payments by refinancing their current loans into new ones guaranteed by the Federal Housing Administration.

The program would broaden the availability of government-backed mortgages to include many borrowers whose loans are held by private companies and who have been unable to persuade those lenders to reduce their interest rates. Existing federal programs focus mostly on borrowers whose loans are owned by the government.

The new plan would require Congressional approval, a difficult hurdle for any legislation in the current polarized environment. Still, some Republicans have expressed support for expanding the availability of refinancing, and White House officials insisted that the plan was not an act of theater.

“I’m sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low interest rates,” Mr. Obama said Tuesday night in his State of the Union address. “No more red tape. No more runaround from the banks.”

full: http://www.nytimes.com/2012/01/25/us/politics/obama-mortgage-plan-would-broaden-government-backed-loans.html

[tridim]

1. We also need to reset/adjust credit scores to reflect the fact that Bush's economic collapse

Caused most of the hits to consumers.

There are millions of people that have already suffered job losses and foreclosure and are still having problems picking up the pieces of their shattered lives. The aftermath goes on their permanent record.

[Ruby the Liberal]

2. The last homeowner refinance deal

destroyed the credit of anyone who was able to take advantage of it.

I hope they take that into account with this round.

[msongs]

3. refi "charges" are just pure rip off greed by banks/mortgage companies...

they sit at a desk and type into a computer for 30 minutes and charge 10 thousand dollars for points and "fees" the dump your loan to sharks
and strip mine/market your data for additional income.

[mike_c]

4. I wish he'd do something about student loan debt....

'Course, one might argue that we're lucky to be indentured for life by student loan debt because it largely kept us out of the housing market and prevented us from being swept up in that disaster, but somehow it doesn't feel particularly lucky. I can never afford a home because of my loan debt, so I won't benefit from aid to underwater home buyers. But any relief from that debt would go right back into the economy immediately.

[Myrina]

5. Yeah because it worked so well the last time ...

Cancel the debts on the funky contracts, reinstate the $1500 home-energy-improvement tax credit and put a temporary (6 months?) stop to ALL foreclosures.

It's really not that difficult, sir.

[TheWraith]

8. Yes, clearly you're smarter than every one of the hundreds of government economists.

Also, smart enough to recommend things which are illegal, like voiding private contracts by fiat.

[Myrina]

11. ... and clearly,

by the tone of your comment ... well, i won't go there.
Just put me on ignore and be done with it, please.

[Missy Vixen]

10. We would love to put solar panels on our roof

There's currently a kit available at Costco.com we have been discussing. With installation, it's not cheap, but hey, if the government wants to reinstate that $1500 home energy improvement tax credit, we might be able to swing it. I'm wondering how many other people would be considering it as well.

Also, AMEN to stopping all foreclosures in the United States for six months.

The governor of Washington State managed to use her bully pulpit to urge passage of marriage equality legislation we were previously told was "dead in the water", and as of yesterday, she has the votes. Why is the President of the United States seemingly unable to do the same for another issue affecting millions of Americans?

[OneTenthofOnePercent]

6. "Rates" aren't the problem... it's the fact that the market flopped.

Suggesting that refinancing is any sort of fix is like giving someone with a gunshot a pain pill... it doesn't address the actual problem.

When the housing bubble burst you got people living in houses that are NOT WORTH what is OWED. No amount of refinance or lower interest rate changes this fact. The big problem is that the collateral on the mortgages (the home) is not ACTUALLY worth the loan amount... and when a savvy homeowner who can't afford payments anymore realizes this they just walk away from the mortgage. Why refinance and pay for something that is worth less that your paying??

I'm one of those people. We bought our house literally months before the market really dropped out a few years ago. I owe 30% MORE on my home than it's worth if I were to try and sell it... and we already have a very low rate too. I'm sticking with it because I have a good job and we like our house. However if I ever get in a tight financial spot I'm sure as heck not going to feel bad about walking away from an underwater mortgage with very little equity.

However, at least the situatoin is being addressed.

[Robb]

7. I'm looking forward to the details, personally.

We're underwater but current on our loan, not backed by Freddy or Fannie. No equity = no refinance. Rates are great, but we can't get them.

Even $100 less per month would make a huge difference around here.

[Snake Alchemist]

9. Why not open this up to everybody? nt