From USA TODAY:
Almost 1 million more homeowners over the next two years might be able to refinance their mortgages and save hundreds of dollars a month under the Obama Administration’s latest fix to one of its underused foreclosure prevention programs.
The changes announced Monday are intended to benefit homeowners who have continued to make mortgage payments, even as home values have sunk, but lack at least 20% equity to refinance and take advantage of today’s low interest rates. The revisions could also help some owners who are underwater, owing more than their homes are worth.
The administration says eligible homeowners could save about $2,500 a year in house payments, providing a small boost to an ailing economy if that money is spent elsewhere…
Click here to read the full article.
EDITOR: We don’t understand the program as described nor can we yet find another article that sufficiently clarifies the matter. Here’s what the Washington Post reports:
…A number of barriers have stood in the way of the program’s success, including limiting it to borrowers who owe 25 percent more than their properties are worth, imposing upfront fees, and banks’ concerns that they might be held financially responsible if borrowers who refinance end up defaulting.
Under the new program, there’s no limit to how much a borrower can owe. Fees will be reduced. And banks that refinance loans will be largely cleared of liability.
Fees will be especially reduced if borrowers take on a mortgage with a duration of 20 years or less. Many homeowners have 30-year mortgages… (more)
