The last week has been flooded with talk about the President’s plan to end the foreclosure crisis and revamp loan modification programs. While these efforts are greatly needed, what about homeowners who have yet to default on their mortgages but may be experiencing the pressure of high mortgage payments?
Refinancing Gets Boost
Obama announced his plans this week to approve a $5 to $10 billion package aimed at helping homeowners refinance their mortgages. Often the preferred option of lenders, refinancing efforts have struggled over the last several years and refinancing applications have hit all time lows. With their ability to lower monthly payments and work to prevent mortgage debt troubles, most homeowners weren’t able to qualify for refinancing under previous standards.
The Home Affordable Refinance Program is being extended to include looser qualification standards and lender incentives. The idea is to gain interest by offering homeowners refinanced mortgages that they can afford while lenders waive some of the previously held costs associated with refinancing. As part of his housing market initiative speech Obama said, “It will take a while for those prices to rise again. But there are actions we can take, right now, to provide some relief to folks who’ve been making their payments on time.”