NEW YORK (MainStreet) -- It’s been a real mixed bag for the U.S. housing market lately, and that’s not what homeowners, economists and politicians are looking for at a time when instability in the market may be sending us into a third dip in home prices. Today, the White House is set to clarify some steps to alleviate the housing market’s woes.
In a speech in Las Vegas to a particularly interested group – domestic homebuilders – President Obama will unveil a series of moves that won’t need Congressional approval and will hopefully help more Americans keep their homes.
What’s on the docket in Vegas today? Here is some ground President Obama should cover:
New financing plan.
The cornerstone of the White House’s plan will enable homeowners with no or low equity in their home to more easily refinance their homes to take advantage of historically low mortgage interest rates (the 30-year mortgage rate stands at 4.4% this week, according to the BankingMyWay Weekly Mortgage Rate tracker).
The new refinancing rules are expected to cover only those mortgage holders who are up to date on their monthly home payments, and whose mortgages are backed by Fannie Mae (Stock Quote: FNM) or Freddie Mac (Stock Quote: FRE). The new refinancing deals will be run through the Federal Housing Finance Agency, via financing from the two-year-old Home Affordable Refinance Program (HARP).
Reduce loan fees.
President Obama is also expected to announce that mortgage loan fees from Fannie Mae and Freddie Mac will be reduced, making it easier and cheaper for homeowners to refinance their loans.
Waive fees on certain refinancing deals.
As part of its housing relief package, the White House is also expected to waive fees linked to mortgage loan deals with shorter repayment timelines.
The new plan also cuts the current 125% loan-to-value ceiling for fixed-rate mortgages backed by Fannie Mae and Freddie Mac.
The White House plan extends the end date for HARP until Dec. 31, 2013 for loans originally sold to the Enterprises on or before May 31, 2009.
The White House hasn’t given any indication when the new rules will kick in, although mortgage industry professionals say the new refinancing deal should be in place for most eligible homeowners within 30 days or so, although some elements could extend into 2012.
There’s no telling whether the new housing reform plan will work or not. But the White House can’t afford to stand still.
According to the National Association of Realtors, existing home sales were down by 3.0% for the month of September, as demand for new homes remained weak.
That’s why the Las Vegas announcement surely won’t be the only one the White House makes in the coming months.
Are you struggling with your mortgage? Refinancing could be a good option for you, but make sure to check out MainStreet's look at 5 Common Refinancing Mistakes and How to Avoid Them before signing that contract!