Will Obama Refinance Your Mortgage?
Several media reports claim that one of the tools the Obama administration may use to resurrect the housing market and help mortgage holders remain in their homes is a program which will let people refinance at current mortgage rates. With rates at all-time lows, refinanced mortgages could save people hundreds, if not thousands of dollars a year.
The New York Times reports that
"A wave of refinancing could be a strong stimulus to the economy, because it would lower consumers' mortgage bills right away and allow them to spend elsewhere." The paper also points out that some federal regulators may try to block such a move. The plan could also complicate the value of certain mortgage-related investments.
The program would face other hurdles. It's possible that financial firms, such as banks, might need new appraisals, a process which can take weeks. There is also the issue of whether the deal would only be extended to people with good credit ratings.
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