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February 2, 2012
On February 1 President Obama, speaking to a crowd in Falls Church, Virginia, detailed his plan to “help responsible homeowners and heal the housing market.” The plan calls for streamlined refinancing for potentially millions of borrowers with loans backed by Fannie Mae and Freddie Mac, while also creating a new FHA mortgage program to re-finance non-GSE mortgages. The FHA program will require Congressional approval as will most of the reforms proposed for GSE mortgages. Most observers consider that approval to be uncertain in the current environment.
For GSE mortgages, the plan would eliminate appraisal costs for borrowers, increase competition among the GSE’s by allowing them to re-finance each other’s loans, cover closing costs, and extend eligibility to all performing GSE borrowers. The new re-fi program for non-GSE loans would include the same elements and be financed by a new Financial Crisis Responsibility Fee imposed on the largest banks.
In a statement to the news media NAR President Moe Veissi expressed enthusiasm for efforts to help troubled homeowners and the housing market while emphasizing NAR’s concerns with elements relating to disposition of REOs. Complete details on the Obama Administration plan can be found here.