New York, Jan 3 :
The US government is considering expanding its mortgage refinancing program to
include borrowers whose mortgages are not backed by Fannie Mae (FNMA.O) and
Freddie Mac (FMCC), the Wall Street Journal reported, citing people familiar
with the discussions.
The refinancing program now being considered also
seeks to include "underwater" borrowers who owe more than their homes are worth,
the Journal said.
The proposal would also transfer potentially riskier
loans held by private investors to the government-sponsored mortgage entities
Fannie Mae and Freddie Mac, the paper said.
Such a move would require
congressional authorization to temporarily change the charters of Fannie Mae and
Freddie Mac, according to the Journal.
About 22 percent of all homes with
a mortgage, or around 10.8 million homes, down from 12.1 million last year, were
worth less than the outstanding balance at the end of June, the Journal said,
citing data from CoreLogic.
Under the proposal, Fannie and Freddie would
be allowed to charge higher rates to borrowers in order to compensate for the
risk of guaranteeing refinanced loans that are underwater and more likely to
result in default.
Officials at the U.S. Treasury could not be reached
for comment outside of regular U.S. business hours.
Combined with Fannie
Mae and Freddie Mac, which buy loans and repackage them as securities for
investors, Washington's footprint in the market has grown to account for nearly
nine of every 10 mortgages.
Ends
SA/EN
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» US may expand mortgage refinance program: WSJ
US may expand mortgage refinance program: WSJ
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1 comments:
It is really great to note that the US government is thinking of expanding the mortgage refinance program. This will help more number of people to take help of federal mortgage help programs and save their property from an imminent foreclosure. This will, in the long run, help in the further recovery of the US mortgage market and stabilize the economy. It will lead to an overall growth of the economy. Moreover, if a person avoids foreclosure, it will also help him save his/her credit from getting destroyed. If the US government comes up with a bill in this regard, it will be in greater benefit of the masses.
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