Obama calls for $5-10 billion for home refinancing

[dipsydoodle]

(Reuters) - President Barack Obama on Wednesday called on Congress to approve a $5 billion to $10 billion effort to help U.S. homeowners refinance as part of a wider package of proposals to shore up the depressed housing market.

Obama had sketched out the proposals in his State of the Union address last week, including a tax on banks to pay for the plan that Republicans quickly rejected.

The White House offered more details on Wednesday ahead of a speech by Obama to expand on his initiative, which some Republicans have derided as an election-year ploy.

Nearly 11 million Americans are underwater on their mortgages, meaning they owe more than their homes are worth. Millions more have lost homes to repossession in states that will be up for grabs in 2012.

http://www.reuters.com/article/2012/02/01/us-usa-housing-idUSTRE80Q20V20120201

Obama proposes broader housing refinance plan.

FALLS CHURCH, Va. (AP) -- President Barack Obama called on Congress Wednesday to make it easier for millions of additional homeowners to refinance their mortgages at lower interest rates even if they owe more than their homes are worth. He conceded that his administration's housing plans have not lived up to their promise.

Calling the housing problem "massive in size and in scope," Obama detailed a proposal he outlined in his State of the Union speech last week, tackling an issue of vital concern in states key to his re-election.

"This housing crisis struck right at the heart of what it means to be middle class in America: our homes," Obama said, speaking at a northern Virginia community center.

Obama's proposal would give homeowners with privately held mortgages a shot at record low rates, for an annual savings of about $3,000 for the average borrower.

http://hosted.ap.org/dynamic/stories/U/US_OBAMA_HOUSING?SITE=WHIZ&SECTION=HOME&TEMPLATE=DEFAULT

[think4yourself]

1. Finally.

This will put millions back into the system.
I hope we can get this passed. Huge stimulus to each household. Huge.

[onehandle]

2. Not with this Congress. nt

[think4yourself]

3. I know.

A broke fella can dream...

[patrice]

6. Well, at least some of us will get to go around bitching about how our Republican reps vote on this.

[harun]

16. Once Congress is done formatting this plan somehow Goldman Saks will end up 10 billion richer.

[Roland99]

4. a tax on banks? Why not the way the FHA (and USDA Rural Housing) do it now???

a percentage fee added onto the mortgage, like PMI.

[PuffedMica]

22. The banks should consider it repayment of the bailout money

Taxpayers came through when the banks hit hard times, now it is time for them to step up to the plate and return the favor.

[PassingFair]

5. "The program would cost between $5 billion and $10 billion..." What is this?

What they will lose in future interest?

[SharonAnn]

8. If future payments aren't made, there is no future interest.

[PassingFair]

9. I know THAT.

What is the money that we are "losing" that we will have to
charge the banks?

Is it future expected interest?

[Cherchez la Femme]

7. Isn't this a little fucking late?

I know there are still a lot more foreclosures to be made this year, but by the time this program goes through Congress (if it does) and is implemented....

Or are they afraid that, even after selling a bunch of foreclosed properties in big, money-saving blocks, there still won't be enough high-rent (possible) slumlords to buy all the foreclosed-upon properties?

And of course all these high-rents will be much more expensive (now, and in the future) than the original foreclosed-upon mortgages!

Isn't capitalism grand?!
(But only if you're already filthy rich, of course!)

[Skittles]

11. WAY LATE - but then, that was the plan

[PassingFair]

19. This isn't for people facing foreclosure. At least I don't think it is.

I just refinanced....

I was kind of surprised at how little equity I had in my house.

After all, I didn't buy at the top of the market. It's just that my
house has lost $60 to $80 THOUSAND in value from the peaks.

When I initially started to talk to the bank (GMAC, the current
mortgage holder wouldn't even talk to me about refinancing),
I wanted to roll my car loan into the refinancing, and they told
me that I didn't have enough equity to pull it off.

Rolling in the car loan might have pushed me back to the point
where I would have to pay PMI again, so it was a no go.

Also, if someone has had a short sale in the past 4 years, they
can't refinance here in this state.

My refi finally went through, no cash out. It will take 2 years
off of my old mortgage and cost me $60 less per month, saving
me $34,000 over my current scheme.

If I was underwater on my house, I couldn't have lowered my interest
rate from 5.875 to 3.875.....

Banks want to do refinances, this will enable people to get the lower
interest rate even if they're underwater.

[Cherchez la Femme]

23. Good for those that can get them

but I still say the timing is truly delayed, and with devastating consequences, for those millions who have already been evicted from their homes
while Wall Street was solely bailed out.

[harun]

17. Election year BS. They know when this should have happened.

[joeglow3]

10. I don't want this

My wife and I have lived way below our means for 12 year. We have lived in a tiny house with our 3 boys and are going to look to upgrade this year.

We lived responsibly and intentionally did not buy a house and we show prices for what they were - WAAAY too high. Now, they are coming back down to levels they should have been at all along and we are excited to be able to upgrade. Instead, we may get hosed as government tries to keep the prices artifically high.

[PSPS]

25. I'm with you.

The vast majority of "underwater" mortgages are the result of either a liar's/NINJA loan and/or using one's house as an ATM to live beyond one's means. Even refinancing to zero percent won't help these people because they can't afford even that payment.

But this is likely only electioneering anyway. As far as I know, a refinance today requires actual proof of income and traditional guidelines on debt/income ratio. So few people with "underwater" mortgages will qualify for a refinance.

[ms.smiler]

28. PSPS, it appears that you’ve bought into the banksters propaganda.

Less than 1% of home buyers bought more home than they could afford. 50% of sub-prime borrowers actually qualified for prime rate loans but were sold sub-prime mortgages because those loans were more profitable.

I purchased my mortgage in 2006 and 80% of the mortgages sold that year contained fraud including my own 30 year fixed rate mortgage.

The Wall Street banks created the bubble in real estate putting homeowners on the hook for imaginary home values. The more loans sold and the higher the loan amounts, the higher the fees, commissions & Swaps the banks could collect on the fraudulent mortgage backed securities the banks created and sold to investors.

Homeowners with equity were encouraged to put that equity to work for them so they could purchase automobiles, pay college tuition, etc. The banksters were just looking for as many loans as possible to sell to investors.

Homeowners are not responsible for being “underwater.”

I am in agreement with you in that I also believe this proposal is little more than electioneering. So many of the loans sold to homeowners contained fraud and I am at a loss to understand how fraud can be modified or refinanced.

We already have a property Title crisis in this country and a mass of refinancing would only worsen that crisis. Securitized mortgages have gaps in the chain of Title as it is. Refinancing would only add additional invalid and fraudulent Assignments of Mortgage & Satisfactions of Mortgage to our land records and do nothing to clear the clouded property Titles.


I’ve been researching mortgage/foreclosure fraud for the past 3 ½ years and filed suit against my mortgage servicer. The trial is presently scheduled for May of this year.

[Snake Alchemist]

12. I really wish I had bought a much bigger house. nt

[cbrer]

13. Oh great

So we can go further into debt to give ourselves a break. Man, I need to think of a racket like this.

[2Design]

14. we want prices to drop to normal levels not these bank and realtor w.... dreams

[iandhr]

15. Mitt said let the housing market hit bottom.

Keep the pressure on.

[Atypical Liberal]

18. Refinancing is not going to help. We need principle modification.

We refinanced under HARP last year. It did save us about $200 a month, though of course it reset the clock on our 30-year mortgage. Since we were only 3 years in, it didn't matter much.

But my house is still worth $90K less than what we owe on it. If I lose my job, I will have no choice but to walk away from it. Honestly, I'm considering walking away from it regardless.

[Old Guy and his pipe]

20. The story links don't work

Try to figure out if you would benefit on the gov't linked forum won't help you. The link is "page not found" .........

[dipsydoodle]

21. Issue must be at your end

I just tried the both and they're fine.

[lovelyrita]

24. What I don't understand about programs like this is that

it does nothing about the principal. I live in Florida and we bought in 2007. In my community, there were so many foreclosures and short sales, our house is worth almost $200,000 less than we paid. Where I live in Central Florida, this is pretty typical. We were already turned down for a HAMP modification last year. My rambling point being, how does programs like this help homeowners like me?

[Wilms]

26. Barrack's been getting out the vote as of late. n/t

[just1voice]

27. Worthless. A real bill would refi at 4 or 5 percent, govt guaranteed

even for people behind on their mortgages. As the 2nd link states "Still, economists say that without reducing the burden on homeowners who are late on their payments, any new housing program will achieve little."

Obama's idea is only for people who can already pay their mortgages. It's BS.

[EFerrari]

29. This is a list item. It does nothing to help people whose property

is upside down.