Today President Barack Obama will announce plans to allow homeowners with FHA insured loans refinance at lower rates and will also detail an agreement with major lenders that will compensate military personnel and veterans who were wrongfully foreclosed upon or denied lower interest rates.
The report, from unnamed senior administration figures speaking on the condition of anonymity, said that the President would make his announcements at the first full press conference he has held since November, scheduled for this afternoon.
Obama is reported ready to announce that refinancing fees for FHA insured borrowers would be cut in nearly in half from the current 1.15 percent of the outstanding loan balance to .55 percent. At the current interest rate of 4 percent the AP said this would lower the monthly payment of a borrower with a mortgage balance of $175,000 by about $100 a month. Unlike programs announced in the State of the Union and subsequent presidential speeches, this is an action the President can take without Congressional approval. Without taking into account borrowers who are underwater on their mortgages, an estimated 2 to 3 million borrowers might be eligible for this refinancing.
President Obama is also expected to announce that major lenders have agreed to review foreclosures to determine if they were done property. If not, military-connected borrowers would be paid their lost equity and be entitled to an additional $116,785 in compensation, a figure reached through an agreement with the lenders, the federal government, and 49 of the state attorneys general. The lenders would also compensate service members who lost value in their homes when they were forced to sell them due to a military reassignment.
-FHA says 2-3 million borrowers will benefit from premium cuts
-The typical FHA borrower will save $1000 per year
-Annual fee for refis will be cut to 0.55%
-FHA refi upfront premiums reduded from 1.15%
-FHA cuts upfront premiums for streamlined refis to 0.01%
-Reduced refi premiums for loans originated before June 1, 2009
White House Fact Sheet on FHA Refi Fee Changes: http://mndne.ws/zXiiWA