President to Outline Plan to Expand Refinancing Opportunities at 3pm Today

By: Jann Swanson • Fri, May 11 2012, 10:36 AM

In remarks scheduled for 3 p.m. in Reno, President Obama will call on Congress to expand mortgage refinancing opportunities as a way to boost the economy. According to Secretary of Housing and Urban Development Shaun Donovan, the president will press Congress to take up legislation introduced by several senators and which Donovan touched on in testimony to the Senate on Tuesday. These bills would expand refinancing for homeowners with both GSE and non-GSE loans and create incentives for homeowners to rebuild their home equity.

According to Donovan, the president will outline a plan with three key components:

Remove barriers to borrowers with GSE insured loans by expanding use of automated underwriting; streamline underwriting process to include not just borrower's existing lender but rest of market as well. Plan would extend these steps to homeowners with GSE- loans who have significant equity in their home
Grant access to streamlined refinancing to non-GSE, non-FHA borrowers; program would be run through FHA
Underwater borrowers who refinance would have choice of lower monthly payments or apply savings to rebuild equity in home; those who choose latter option would have closing costs covered