President Obama pitches mortgage plan to help more people refinancePosted: Updated:
PHOENIX -- Thousands of empty, foreclosed homes sit in Arizona. Realtor Tiffany Young sees the market's problems every day, and the lack of solutions.
"Keeping people in their homes should be the No. 1 goal, but it has to be a reasonable goal," Young said.
It's a goal President Barack Obama is shooting for with his new mortgage plan, that has a focus on refinancing. If you meet certain requirements, you will have the chance to refinance at lower rates which could save you hundreds of dollars a month.
Other programs have tried and generally failed at providing more refinancing options, thanks to high standards of eligibility. The president wants make this plan succeed with broader eligibility, making it possible for more people to lower their monthly payments.
Next come lower closing costs, and waiving certain fees. And finally, the president wants more competition for lenders to get you the best rate.
"We're really not treating the cause, we're treating a symptom of a cause," Young said. She feels this may not do enough. Even if more people can lower their monthly mortgage payments, it still doesn't erase how much they owe.
"If you're carrying an underwater balance of a significant amount of money, that effects everything you do," Young explained. " It limits your ability now and in the future for quite a bit of time and it's significant."
If the president's plan goes forward and your mortgage is with Fannie Mae, Freddie Mac or the Federal Housing Finance Agency, this may be an option for you. Whether it's the thing that turns around the market remains to be seen.
This plan is not a done deal yet, but it could happen without a vote from Congress. The Obama Administration just needs final approval from the FHFA. They reportedly want to make this happen by the end of the year.