endeavor recentlycl: President Obama's Refinancing Plan for Homeowners

Friday, February 3, 2012

President Obama's Refinancing Plan for Homeowners

This morning, in Falls Church Virginia, President Obama announced his Refinancing Plan for responsible homeowners. From the press conference, it was mentioned that homeowners can qualify for historically low interest rates while potentially saving homeowners $3,000 annually on their mortgage payment. The keyword is qualify and historically the government has not made it super easy for responsible homeowners to take advantage of programs.

The refinancing plan will not help anyone who?s decided that walking away from their home is the best option ? it is unclear how being behind payments will affect qualification. With that said, if a homeowner has been adversely affected by job loss that this plan will be able to help those folks, that is my understanding anyways. According to the HuffingtonPost.com:

The plan would expand the administration?s Home Affordable Refinance Program, which allows borrowers with loans backed by government-affiliated mortgage giants Fannie Mae and Freddie Mac to refinance at lower rates. About 1 million homeowners have used it, well short of the 4 million to 5 million the Obama administration had expected. Moreover, many ?underwater? borrowers ? those who owe more than their homes are worth ? couldn?t qualify.

The CFPB Director Richard Cordray?s Response to Administration Housing Announcement released on WhiteHouse.gov:

?The principles articulated by the Obama administration today are good guideposts for much-needed reforms in the mortgage market. The problems that plague consumers are well-documented. Too many consumers were steered into complicated mortgages that they did not understand and couldn?t afford. Too many families were forced into foreclosure because paperwork was lost, phone calls went unanswered, errors were not resolved, or documents were falsified.?

?To protect consumers, there must be clear rules of the road and real consequences for breaking them. The Consumer Bureau is already hard at work making the costs and risks of mortgages clear upfront through our Know Before You Owe project. The financial reform law also requires us to create new mortgage servicing rules that hold servicers accountable for disclosing fees and fixing problems. We are also working with other federal agencies to develop common-sense national servicing standards. But having rules in place isn?t enough. We are closely monitoring mortgage servicers to make sure that no one gains an unfair advantage by breaking the law. Taking these steps to fix the mortgage market is good for consumers, honest businesses, and our entire economy.?