With millions of American homeowners facing foreclosure, President Obama announced that he was enhancing the HARP refinance plan effective immediately. The Obama refinance initiative will extend the Home Affordable Refinance Program to provide an option to refinance underwater mortgages. Many homeowners have been waiting for a more substantial Obama mortgage plan and the expansion of HARP is a great start. If your mortgage balance is more than your house's value then the Obama refinance may be a wise financial decision that can lower your housing expenses while helping you keep your home. HARP refinancing enables all eligible homeowners to refinance no matter how high their loan to value may be. The Obama refinance initiative mandates lower payment and interest rates regardless of a borrower's equity status.
Reuters reported that mortgage securities issued by Fannie Mae and Freddie Mac tanked in stock price after news spread that the Obama refinance initiative would further expand an existing refinance program to more borrowers and removing a key obstacle that has kept bankers from approving more 100% mortgages.