Obama reveals a series of rule changes to help underwater homeowners.
WASHINGTON — Seeking to circumvent congressional opposition, President Barack Obama is promoting a series of executive branch steps aimed at jumpstarting the economy this week, beginning with new rules to make it easier for homeowners to refinance their mortgages.
The White House said changes to the two-year-old Home Affordable Refinance Program will help homeowners with little or no equity in their houses refinance by cutting the cost of doing so and removing caps to give deeply underwater borrowers access to the program. The new rules apply to homeowners with federally guaranteed mortgages who are current on their payments.
This is a terrible terrible idea. It’s being promoted as a stimulus when it is really another bank bailout at the expense of tax payers (on the front end) and homeowners (on the back end being conned into paying more for a property that is worth less) Refinancing an overpriced house at a lower rate is still paying too much. Many of these houses are so underwater that they will never recover the current value of their mortgages while the mortgage is still being paid on.