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The White House has promised that President Barack Obama’s jobs announcement next week will off new ideas.According to Reuters, the Obama administration is considering expanding existing mortgage programs to allow homeowners owing more than their home value to refinance and take advantage of near-record-low interest rates.
The plan would free up more money for borrowers to spend monthly on other things — and would both serve as an indirect stimulus and deal with one of the underlying issues behind the nation’s slow recovery from the Great Recession.
Fannie Mae, Freddie Mac and the Federal Housing Administration would be authorised to refinance people who are current on their mortgage payments, though it is not yet clear if borrowers seeking loans of more than 80 per cent of the value of their home would qualify.
This would not be the Obama administration’s first foray into dealing with the mortgage crisis — the 2009 Home Affordable Refinance Program, intended to help 4 to 5 million people, has only assisted 810,000 acquire lower rates and avoid foreclosure, according to Reuters.