As much as the government talks about staying out of housing, it can’t. President Obama is expected to unveil a new refinance plan today in Virginia at 10AM CST. Whatever plan it is, no one expects it to pass through Congress, IF Congressional approval is required. Recall that this plan was previewed by Obama during his SOTU address last week. The plan would allow non-agency mortgage holders (so those mortgages not backed by Fannie/Freddie) who are current to refinance into a lower-interest federally insured mortgage (via the FHA). Borrowers could qualify even if they had negative equity. The plan could help as many as 3.5M homeowners refinance. The plan is expected to cost ~$5-10B and Obama will call for a new fee to be charged to banks to pay for the proposal – because they have all the money, right?
I don’t know about you, but since history has a tendency to repeat itself rest assured, any and all costs will be passed onto the Homeowner.