So..whatever happened to Obama's plan to reduce interest rates?

For a while there the plan was to force the banks to reduce rates to 4.5% or less to allow people to refi or buy houses. Seems like I remember billions of dollars being used to buy mortgages so rates would go down. But rates have gone back up. Did they give up?

I don't know.

:shrug:

I read that ShitiBank has some voluntary plan to reduce mortgage payments for certain people.

I don't recall hearing anything about forcing banks to lower rates. I don't know how Obama would be able to do that unless all of the banks were fully nationalized and it doesn't look like that's going to happen

http://www.bankforeclosuressale.com/wp/article-0217534.html

The effort to help distressed homeowners avoid foreclosure is part of the $50 billion housing plan aimed at reducing the number of foreclosed homes and creating national standards for home loan modification.

The Obama Administration has several options to abate foreclosures. It could adopt Federal Deposit Insurance Corp. Chairman Sheila Bair’s proposal for the government to subsidize losses should homeowners fail to meet their payments again. This proposal is aimed at encouraging banks to lower payments of borrowers.

Or, the Obama Administration could use the allocated funds to modify loans. This involves the government subsidizing a further drop of interest rate if lenders agreed to lower a loan borrower’s rate.

The biggest challenge posed by these foreclosure prevention options is how to choose homeowners who will qualify as the number of abandoned and vacant properties in the country rises to over 274,000

????? :wtf:

But I think it has to do with the 200 billion going to Fannie/Freddie

http://washington.bizjournals.com/washington/stories/2009/02/16/daily47.html

"The federal government will provide up to $200 billion in additional capital to Fannie Mae and Freddie Mac so that those institutions, which back most new home loans, “can continue to stabilize markets and hold mortgage rates down,” Obama said."

http://latimesblogs.latimes.com/money_co/2009/02/mortgage-rates.html

The Fed was buying up mortgages to try and drive rates down back in January. I guess it worked for a week or so, but hasn't done much lately if at all. Not sure if Obama's planned infusion of 200 bil is the same thing....

In either case, it sucks for me, as I would definitely have benefited from getting a loan at those rates. Too slow....

:(

http://www.bankrate.com/brm/news/mortgages/mortgage_news_changes_a1.asp

Two sets of homeowners will be eligible to get help under the Obama administration's foreclosure-prevention plan:

1. People who got plain-vanilla conforming mortgages and who have never fallen seriously behind on the monthly payments might qualify to refinance at lower interest rates -- even if they owe as much as the house is worth.

2. People who have subprime mortgages, or exotic loans such as pay-option ARMs, might qualify to keep their current loans, but have them modified to make the payments more affordable.

<snip>

The plan has two main pieces: refinances for conforming loans, and modifications for subprime and exotic loans. The refinance piece is designed to help 4 million to 5 million "responsible homeowners."

Who are these responsible homeowners? They:

Haven't fallen behind on their monthly payments.
Owe more than 80 percent of their homes' currently appraised value.
Owe no more than 105 percent of the currently appraised value.
Have mortgages that are owned or guaranteed by Fannie or Freddie.

<more>

Even in this market. What I have found is that real refi rates are much higher than advertised, or come with boatloads of points/fees/conditions that make them unpalatable.

They can't get much lower. You can already get a fixed rate loan for under 5%.

Every place I look the rates are 5.3 to 5.6, in Georgia. That is without paying 2-3 points....