President
Barack Obama speaks during a cabinet meeting in the Cabinet Room at the
White House January 31, 2012 in Washington, DC. Obama has recently been
discussing his efforts at job creation as the Republican presidential
candidates vie in the Florida primary today.
The
White House said the refinance program would be run by the Federal
Housing Administration. The FHA has already been hard hit by rising
defaults on mortgages it had insured, and its cash reserves reached a
record low last year.Many Republicans are likely to resist a larger role for the agency out of concerns taxpayers could be left on the hook for losses.
Obama's proposal, which needs congressional approval, would be open to borrowers who have been current on their payments for the last six months and have no more than one missed payment in the prior six months.
The administration also wants to broaden its Home Affordable Refinance Program, which seeks to provide refinancing options to underwater borrowers who have no equity in their homes.
The White House said the housing regulator overseeing Fannie Mae and Freddie Mac has exhausted its efforts to make HARP more widely accessible to lenders and borrowers, and now it will ask Congress to make changes. Among those requested changes, it will seek to eliminate the costs of appraisals.
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