• 25
  • October
    2011

According to sources, roughly 11 million Americans are underwater on their mortgages and unable to refinance. With many homeowners struggling to make their mortgage payments and teetering on the edge of foreclosure or bankruptcy, there is no doubt that the times are tough.

In an attempt to respond the struggles of Americans, President Obama presented a new plan yesterday to assist Americans whose mortgages are underwater by broadening the rules for refinancing. The plan, which was presented as a response to Congress' lack of action on the matter, seeks to allow more homeowners to refinance their mortgages in order to avoid foreclosure.

Under the new rules, which were announced by the Federal Housing Finance Agency yesterday morning, there will no longer be caps for "underwater" borrowers and the costs of refinancing will be reduced. Homeowners that qualify will be able to refinance at lower rates, which is expected to free up money that would otherwise have been used for mortgage payments.

The new plan is one of several executive actions the president will be presenting in the next several weeks, all of which are intended to stimulate economic growth. Meanwhile, President Obama's jobs plan is at a standstill in Congress. The jobs plan, President Obama has said, is necessary to help grow the economy, but his administration will be on the lookout for ways to act without the approval of Congress in order to help bring relief to consumers and boost the economy.

Sources said the plan was announced in Las Vegas, Nevada, where the housing market is among the worst in the nation.

Source: ABC News, "Obama Offers Mortgage-Relief Plan: 'We Can't Wait' for Congress," Mary Bruce, October 24, 2011.