Homeowners with government-backed mortgages could get a crack at accessing historicly low interest rates, something that’s been out of reach of many homeowners with upside-down mortgages or tarnished credit.
The news that the Obama administration was considering letting homeowners with Freddie Mae and Freddie Mac mortgages negotiate for lower interest rates was reported today by the New York Times and offers some hope for the thousands struggling to keep their homes.
It could also mean savings of up to $85 billion a year for homeowners in the county, money that would spent elsewhere in the ailing economy.
From the Times article:
One proposal would allow millions of homeowners with government-backed mortgages to refinance them at today’s lower interest rates, about 4 percent, according to two people briefed on the administration’s discussions who asked not to be identified because they were not allowed to talk about the information.
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. But such a sweeping change could face opposition from the regulator who oversees Fannie Mae and Freddie Mac, and from investors in government-backed mortgage bonds.
But the proposal is just that right now, and U.S. homeowners have gotten a lot of empty promises of help since the housing market began in cave in 2007.
We wrote about one of those empty promises, the HAMP (Home Affordable Modification Program), that was supposed to usher struggling homeowners into reasonable payments with their lenders. But lenders ended up dragging their feet, left homeowners in limbo for months or years, and few that applied ever ended up with modifications through the program backed with $75 billion in federal funds.
When we reported on the HAMP program last year, only 9,000 North Carolinians had gotten help from the program that was supposed to help millions nationally. Today’s projection isn’t much higher, with only 12,000 people in the state that got modifications from their mortgage servicers, according to a June report from the federal government.
Consumer advocates are hoping that this time the modifications really do come through, and to those that need it the most.