Mortgages Blog

Finance Blogs » Mortgages Blog » Massive refinance plan on the way?

Massive refinance plan on the way?

By Polyana da Costa ·
Friday, August 26, 2011
Posted: 3 pm ET

The Obama administration is discussing a massive refinance plan to help millions of homeowners refinance at today's historically low rates and avoid foreclosures, The New York Times reported this week.

Wait, wasn't that what HARP was supposed to have done when the government launched it in 2009? HARP, the Home Affordable Refinance Program, was designed to help borrowers who owe more than what their houses are worth refinance at a lower rate, so they could afford to keep their homes. But as you probably know by now, the plan was a disaster.

I guess the government has finally realized HARP failed and is ready to give it another try at solving the foreclosure crisis.

But don't get your hopes up yet.  The Times reports that administration officials are considering a range of proposals, but the plans described in the story are vague and it appears they are in early stages of discussion.

"Exactly how a refinance plan would work is still under discussion," the Times reports.

One of the proposed plans would allow homeowners with mortgages owned by Fannie Mae and Freddie Mac to refinance their mortgages at 4 percent interest, according to the story.

Whether Fannie and Freddie are going to go for that is another question. Contrary to what some think, the agencies are not legally controlled by the Obama administration. Yes,  Fannie and Freddie have used more than $170 billion in taxpayer money to stay afloat, but they are controlled by the an independent agency, the Federal Housing Finance Agency.

And the FHFA, which is led by acting director Edward DeMarco, will not support any massive refinance plans.

As much as I want to believe there is rescue on the way for borrowers, I can't help but think this is just another political game as we approach the 2012 elections.

Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
October 25, 2011 at 8:58 am

I have two loans from wells fargo and never been late I asked for a ref i and they basically laughed me out the door because they are making really good interest on me they don't want to help and my loans don't fall under any type of harp Fannie or freddie so because I am trying not to abuse the system by walking and struggling to be faithful to my loans they treat me like I am the bad guy. I really had a banker tell me that I should not make my payments so I would qualify for help ? what kind of country is this becoming ? no help coming my way I just have to suffer I even had to forfeit my medical and dental to make my mortgage payments. THANKS BANKS AND HARP!

October 24, 2011 at 4:44 pm

This is to help the mortgage bankers not the people that
still owe more than what their house is worth. Housing
prices are still falling so they could owe $100,000 with
lower interest rate when their house is only worth $50,000.
Not a good deal to say the least.

J. Smith
September 03, 2011 at 1:47 am

Whatever plan they come up with, it has to limit the qualifications, like if your mortgage is being held by Fannie mae or Fannie mac.

Since I only took my mortgage in the beginning of 2008, my bank still owns it. Not Fannie. So once again...if they do this, I will be shut out of it and no help will come my way.
I lost out on the last qualification for help by means of a few months time.

I'm so disheartened over all of these plans that will eliminate me by something.
They MUST come up with a plan that will include anyone and everyone who has good credit and who pays their mortgage and who is being left out.

I am sick & tired of not qualifying by the skin of my teeth.
It isn't fair to people in the same boat as I'm in. And I'm getting totally disgusted with this government, along with all the banks.

I'm trying to live & pay for my home on less than $2000. a month, thanks to the stupid court system and my ex-husband's revenge. How will I ever be able to keep up with it, if I can't get any help anywhere ?
I'm willing to pay my share & I have been. But I don't know how much longer I can take it, living like this.

I spent all my savings for a down payment so my payments would be affordable.
What do you do when your disabled and can't work to make more money, and all of your savings are gone ?

I guess this is where some people get up & walk away, losing every dime they used to get their home in the first place. And who profits from this ? The banks, that's who.

Who was it that actually raised this LTV thing anyway ? Was it the banks ? It jumped from 45% up to 90%. Not too many can qualify at this point. I sure can't.

Where does it leave me ? It leaves me broke, with no savings left & without any home at all.
How is this fair ?
Please, Please....think what you are are doing before you leave the "right" people out of getting help.

I have paid the bank more than half of what my home is now worth. But my mortgage balance is more like 90% to 95% of what my home could be sold for now. Won't somebody make them meet me in the middle at least ?
Why should every homeowner be the only one to suffer the losses ?
The banks should take some of this away from us. After all....we did bail them out so they wouldn't sink. Plus, they'll still make a profit if the loans are getting paid. So why do they have to be so greedy ?
If all the CEO's of these big companies weren't so greedy too, there would be lots more jobs being offered also.

August 28, 2011 at 10:15 am

As they say,"The road to Rome was paved with good intentions" The problem,as I discovered twice, is banks have their own "overlay" to the HARP 125%. If Regions Bank is not your mortgage holder their LTV is 90%. With Aurora Loan Services (Aurora Bank) even if they are your mortgage holder their LTV is 95%. Even though I have had a perfect pay record with them for 5+ years and my LTV was 99%, I was still denied and lost my $400 appraisel to add salt to the wound. LOL Aurora does have a lot of negative narratives on the various blogs on just how they do busines and treat their clients.


August 27, 2011 at 11:44 am

Quite a cynical finish to this article. At any rate, the major banks are in talks with the Administration and state attorneys general for a rather large settlement for all of the robosigning and preditory lending tactics that were a part of the mortgage meltdown. This IS something that is likely to happen by the end of the year. Google it if you don't believe me...I recently attended a focus group to test the messaging so it is going to happen. Google foreclosure settlement, state attorneys general and look at all of the news stories. Something is going to happen on this front and it will be up to the state attorneys general how the settlement will be used, whether it will be principal write-downs, refinancing or other options.