Obama pushes Americans to refinance homes

[antimatter98]

Source: The Hill

President Obama used his bully pulpit Thursday to encourage Americans to refinance their homes, which could stimulate consumer spending and pump up the economy.

Obama trumpeted programs that have helped drive mortgage rates to their lowest levels in decades, and encouraged home owners to re-finance to put more money in their pockets. He also hawked an administration web site mean to encourage Americans to refinance their homes.

Read more: http://thehill.com/leading-the-news/obama-pushes-americans-to-refinance-homes-2009-04-09.html

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Like when Bush said: "Go Shopping!"

Lots of money in refinancing---fees+bonuses.

[Mz Pip]

1. We refinanced ours

and will save over $500 a month. Yes, there are fees but since we don't plan on moving for years and years we will end up really cutting our cash flow.

It's not going to be worth it if you are planning on moving in 1 - 2 years, though.

[mike_c]

2. what about those of us who don't own property, or who don't owe the bank...?

:shrug:

[JayMusgrove]

3. Then I guess this is not for you. Just a guess on my part.

If you buy a house, you get a deal now. If you work, you get a tax break,too.

[mecherosegarden]

17. I wish it was that easy.

My credit is good, but because I took a year off of work, I don't qualify for a mortgage loan . I guess that I will have to wait another year!

;(

[Hassin Bin Sober]

64. That shouldn't be an issue unless you are self employed....

......or rely on "irregular" income such as bonus, commission, part-time etc.

If you are hourly/salary you income should be OK from day one.

The irregular income might require a two year track history which might cause you a problem.... but the regular income can be calculated immediately.

The underwriter might request a letter of explanation as to why you were off for a year but just about any excuse will do - just don't tell them you went on a drug bender.


(I'm a Loan Officer)

[county worker]

5. What about me? I have a 4.5% loan. I want a zero % loan. Who's going to help me out?

[Schema Thing]

6. I don't understand your question

[mike_c]

29. I was highlighting the circumstance that this is not an economic stimulus...

...that benefits all Americans. It only benefits those who have taken on mortgage debt. What about a stimulus-- i.e. increased access to spending green-- for those of us who are just as affected by the current economic downturn but don't have mortgages to refinance?

[Schema Thing]

35. ah. I figured it goes w/o saying that a refi program won't *directly* help

anyone without a mortgage. I'm in the same boat.

[Qutzupalotl]

41. That's what the payroll tax cut was for. nt

[mike_c]

63. it's not either/or....

If you want to view it that way, then workers with mortgages to refi get a double stimulus, since they also get the tax stimulus. Any way you slice it, this proposal targets benefits toward a subset of Americans and excludes the rest of us.

[onehandle]

15. ugh.

:eyes:

[jody]

26. How dare you practice thrift so you won't become a lackey of the corporate state. n/t

[mike_c]

30. exactly....

eom

[Bonhomme Richard]

4. I just left the bank.

We are going to do what's called a "Step Down". For $900 all we have to do is go in, sign a new note and the rate will be 4.75%. Will save $21,000 over the loan life.
Not bad.

[pattmarty]

7. Isn't this encouraging the same shit that got us into this mess?

I am slowly but surely losing confidence in the Obama administration.

[MercutioATC]

16. Exactly. Refinance and put some money in your pocket?????

:wtf:

[SomeGuyInEagan]

21. He is not suggesting people refinance and take out equity.

He's only targeting the 7 - 9 million who are already at a higher rate and able to qualify for a refi.

He is only suggesting refi to get a lower rate and have lower monthly payments, which will put more discretionary income into play in the economy each month (good for the macro economy) or to use it to pay off existing non-home debt or create a savings cushion (both good for you). Some will do what we did a couple of years ago - refi at a lower rate (and took ZERO equity out of the house) and apply the difference toward the principle on the mortgage each month - shaving eight years off our 30-year mortgage in our case if we continue with this through the life of the loan while directly acquiring equity (because we are lucky and our home value has held this past year).

It is not going to solve the problem, but simply a piece of the puzzle. I still expect more for those who have lost homes, are upside down on mortgages, in danger of losing homes, etc. This is just one, small step that can help get some money back into the economy.

[Veruca Salt]

22. Exactly! My parents just did this

and will be saving themselves a couple hundred dollars a month due to the low interest rate which, as I know them, they will definitely spend back into the economy one way or another.

[pattmarty]

27. dream on.

[superconnected]

46. Excuse me? I take it you have no idea what he just said.

I just refinanced from 6.0 down to 5.0 and it only cost me 1k to do it. It saves me 57k on the life of the loan. I now pay nearly $200 less a month for my house. That's good for the economy. Anyone who doesn't understand that, has no idea what Obama just said.

[Generator]

60. I want your lender!

Where is this magic $1000 to refinance-I'm looking at at least $3500 around here. And we have great credit yadda yadda.

[Hassin Bin Sober]

66. 3500 sounds high.

Are you including pre-paid escrows in that figure? Pre-paids, while an "out of pocket" and a hardship , aren't really costs.


I've done loans in Oregon and I don't remember title fees being too high. I don't believe you should be more than 1500 total "costs"

That said, don't pay any points. perhaps you are looking at a low-ball advertisement that has points built in? Ditech/GMAC is famous for running those bull-shit rates with two or three points built in.

[superconnected]

71. Cobalt Mortgage in Kirkland WA.

[superconnected]

72. Cobalt Mortgage Kirkland WA, Jill Bartoletti is the loan officer who did mine.

[jmowreader]

42. Not necessarily

During the Bush administration, the less-scrupulous mortgage companies wanted you to refi out of fixed-rate notes into Option ARMs...and quite a few people did it.

If Obama wants people to refi out of the Bush-era Option ARMs back into fixed-rate notes, that's outstanding.

On edit: Option ARMs are possibly the riskiest mortgage product ever devised, and they are ALL subprime by design.

[superconnected]

45. Apparently you have no idea what he just said then. It make very good fiancial sense

to refinance to a lower rate. Spending less on housing does help the economy because people can spend that money other places than on interest for their home.

[Vidar]

8. Save the banks at all cost. Shame on you, Obama.

[Mz Pip]

25. For what it's worth

it will be saving people like us who are on a fairly fixed income but have seen our retirement investments tank. This will give us some breathing room until the economy picks up.

It's not just about the banks here.

[superconnected]

47. How is this saving the banks, they're going down to far lower interest rates on their loans with

this. It works out best for the home owner.

[Habibi]

9. Can you still do it even if you don't currently have an income?

My husband and I both lost our contract work in January.

[Lorien]

11. My thoughts exactly. I also lost my contract work mid-December

I'm living off my home equity line now. Until (even IF) we can find more work, what are we supposed to do?

[Romulox]

10. Let's just inflate the bubble again. Then everything will be OK! nt

[acmavm]

12. Well, how about that? I'm behind in my medical bills and I am

trying like hell to refinance my school loans because my house have been cut to the point that I get 30+ hours FOR TWO FUCKING WEEKS! I work for a company in the manufacturing industries. I'm getting some hours back but not enough to stay afloat. I got in 4 the other day. This is where all my vacation goes. And then when I run out of vacation hours, I just punt.

How does this guy think those of us who are getting burnt by the bastards crimes on Wall Street are gonna refinance?

[olddad56]

13. The definition of insanity is doing the same thing over and expecting it to turn out differently.

going deeper in debt is not the answer.

[Iowa]

32. Maybe I'm missing something....

...but this would actually decrease a home-owner's debt, right? A lower interest rate reduces the amount paid over the life of the loan.

But if you're referring to the massive increase in the NATIONAL debt caused by all of the taxpayers' money being handed out to the bankers who created this disaster, then I agree with you.

[olddad56]

59. I was thinking more along the lines of people refinancing to take equity out of their homes.

To buy that new SUV, or whatever. I have a 15 year loan at 5% and my goal is to pay the house off, then have the money to buy the less esential things, like an SUV. BUt, I'm 60 years old and should already have the house paid off. Too many refinances.

[onehandle]

14. He obviously means refinance Only if it saves you money.

We've refinanced and are about to again.

It's Saved us Thousands.

This is not "like Bush."

[pattmarty]

20. Bullshit!! Re-read the WHOLE article and get back to us when............

..................you read the part about "which could stimulate consumer SPENDING and pump up the economy". I am only a high school graduate, but that sounds just like you should refinance so you will have extra money to "spend". That's the same shit that got us where we are.

[onehandle]

31. Re-read my post. I did not address that part.

I only addressed re-financing.

[Telly Savalas]

40. So you think folks should stick with higher interest rates

so they'll be giving banks a larger portion of their income?

[pattmarty]

69. Did I fucking say that??? This shit ain't something new, pal..............

............you ALWAYS could refinance your house if the rates came down, nothing new in that. If you refinance to save on your monthly payment, fine. If you are refinancing to "cash in" on whatever "equity" you may have, then yeah, it's part of the same shit that got us here. No matter what the Obama admin says, people should be saving now and/or paying off some of their debt. Time for fucking common sense, not spend, spend, spend on shit, shit, shit you don't fucking need.

[jmowreader]

44. There are two ways to see this...

Bush would have had you refi and take money out of the house, hence stimulating consumer spending and pumping up the economy on a one-time basis.

If Obama means "refi into a fixed-rate note with a lower payment," the homeowner will obviously have more money to spend on non-housing items. This, unlike Bush's tactic, will result in the potential for extra consumer spending over the life of the note.

[Autumn]

53. That was when I said

:wtf:

[subterranean]

18. Well, duh.

It's a good idea for those who still have equity left in their homes. As the article says, many people have already refinanced. But it's hard to do that if you're upside down on your mortgage.

[Carni]

19. That'll really help people with f'd up credit...NOT!!!!

I have tried to stay positive and open minded but this is just stupid.

It is very similar to telling people to go shopping IMO

[Xithras]

23. Sure Mr. Prez. Point me to a bank that will refinance my $380k mortgage on a $125k home.

Banks won't touch you for a refinance nowadays unless your home is worth at least 125% of the outstanding mortgage balance. In many regions of the country, that excludes everyone who has bought in the last 10 years. Those buyers tend to be younger, first time homeowners and middle class workers with younger families...the very demographic that tends to spend the most money on consumables in our economy. Those buyers are either stuck in their current loans, or are walking away from those properties anyway.

The group of people we most desperately need to see spending happens to be the group of people with the smallest chance of having any free cash at the moment.

I saw an analysis recently that proclaimed that home-owning retirees were the only large segment of our population with any significant equity in their homes any longer. The younger the demographic, the less likely they were to have any substantial equity. In urban areas, the average American under 35 has none, or nearly none. Among homeowners under 25, the average homeowner was upside down. Somehow, I don't see the blue-haired set running out to buy new plasma TV's, ski boats, and SUV's in any appreciable numbers.

[YvonneCa]

33. Why the need to slam older...

...folks?

[Xithras]

dup

Odd

[Xithras]

36. dup

Triple submit...haven't seen this one in a while. Keep looking down for the real post.

[Xithras]

37. *scratches head* Where?

I didn't intend to slam anyone. These are basic facts of modern marketing...older folks generally spend far less money on luxury items even when they DO have the money to spend. Older homeowners are also far more likely to have equity in their homes because those homes are more often paid off, and they're less likely to tap it as a cash source by utilizing equity loans. There's nothing insulting about any of that, it's just the reality of the demographic.

[YvonneCa]

51. I believe you. But referring to 'older folks' as...

...the 'blue-haired set" is demeaning. Your words: "Somehow, I don't see the blue-haired set running out to buy new plasma TV's, ski boats, and SUV's in any appreciable numbers."

You may not have intended to slam anyone, but generalizing in that way is an insult. So is name-calling. IMO, it's similar to what happens with any other bias (race, gender, age, religious) when a person assumes that a characteristic of a MEMBER of that group applies to all people in that group.

Most 'older folks' don't have blue hair...I certainly don't. My home IS NOT near being paid off. Who says I wouldn't buy a luxury item? :7

[Xithras]

58. You're the first person I've ever seen take offense to that term.

"Blue hair" is just a slang term for an old person. Kinda like "fogey", "little old lady", or "old fart". I've never heard any of those used as an insult, and all are generally used as humorous but friendly references to our chronologically challenged family and friends.

I've heard every one of these terms used by old people themselves, and until now I've never heard of someone taking offense to their use.

[YvonneCa]

67. Well, maybe it's time more people stood up to...

...such 'friendly' references. (BTW, those other terms are also offensive.) I'm old enough to remember a population that never questioned or stood up to jokes about people of other races. Or when a person used a derogatory term about women. It was racism (and sexism), pure and simple.

That is not tolerated...at least not in progressive circles...in 2009.

Please understand that I do not think you deliberately disrespected 'older folks.' I just think it's time we educate each other about the language we choose to use. PEACE.

[SPedigrees]

61. True, we older folk have already filled our houses

with every imaginable tool, appliance, home furnishing that we will ever need. Therefore we tend to spend less money because there are less things we want or need. Ever try buying a gift for an older person who "has everything?"

Well I have red hair from a bottle, but yeah I count myself as in with the blue-haired crowd.

[YvonneCa]

68. Welcome to DU. n/t

[superconnected]

49. Considering I bought my house in Nov and Refinanced in Mar, I don't think that equity is the case.

I'm pretty sure I have 0 equity in my 3 month into buying house when I refinanced down to 5.0 from 6.0 interest for only 1 thousand dollars. I loved how they waved the closing costs of the refinance and the lower payment each month that equates to nearly 60k saved on the life of the loan. Maybe you should get a different bank.

[iris27]

57. I've been in touch with most of the major banks...only person I know who's

been able to re-finance lately was my little brother, who, yes, had owned his house for less than a year at the time. But he went through a shady mortgage broker and paid over $5,000 in fees and closing costs.

[Autumn]

55. Not true

this old lady bought a new big screen plasma TV, it was a 37th anniversary/retirement present for the Hubby.Of course I didn't run out and buy it. I bought it on-line.:hug:

[Hassin Bin Sober]

65. I haven't read all the details yet but Fannie has come out with a program...

......for people stuck with the high loan-to-values. It's called DU refi Plus. (DU = Desktop underwriter)

Some lenders will take it up to 105%

I guess I should get off my ass and read the memos. My office is buzzing about it and I have a few friends this might help out.

[OhioChick]

24. "re-finance to put more money in their pockets"

Sounds like spend, spend, spend to me.

[superconnected]

48. You mean to put money in the home owners pockets because it's taking it away from the banks.

Sounds like all those homeowners getting the lower rates with this are saving their money from having to pay it to the banks. It's up to them what they do with the money they save from that. If it's blow it, it still helps the economy. The 57k over the life of the loan I saved in my refinance helps my personal economy a whole lot.

[Betty]

28. I tried...

if you're self employed, as I am, you are considered the scum of the earth. Because my schedule C income is not high enough, i was told that the debt/income ratios were all off and I couldn't get a lower rate. In other words, I don't make enough money to pay LESS.

[crankmob]

34. ?!?!?!?!?!?! Obama ?!?!?!?!?! Who are you?

wow

[superconnected]

50. So... are you against negotiating credit cards down to lower rates too? I figure you must be.

BTW, I only have 1 credit card with a whole 2k limit. I only got it to establish credit to buy my house. Now I'm getting rid of it. I can't stand credit cards. I'm just looking at your logic.

[mountainvue]

38. If it makes sense for people to refinance then

why shouldn't they? And this is nothing like when Bush told everyone to "go shopping" after 9/11. Our country was in mourning and that fucktard told people to go shopping. That was the most guidance anyone got out of him concerning that incident.

[jtb33]

39. I'd love to, but I can't... I have no equity left....

Paying fixed 5.5%, but am SLIGHTLY upside-down in my mortgage, so refinancing isn't an option. Still have good job, excellent credit and low DTI ratio.

[superconnected]

43. I re-financed this month. It saved me 56k on my loan. It actually saved me 57 but it cost $1k to

refinance. I bought the house in November at 6.0 interest and refinanced to 5.0.

I'm rather hoping it will go down to 4.0 and I'll refinance again.

Obama is not saying spend, spend, spend. Refinancing can be a very good idea to save a whole lot in interest. Of course if you do it to get money out of your house, then it's like using your house as a credit card. I wouldn't advocate that at all. It depends where you are in your mortgage, how much you can save to how much the cost of refiancing is, and that the person isn't doing it to draw out money but to actually get a far better interest rate on the house.

[Autumn]

52. Sorry I'm not going to

got six years left and a very small mortgage. I will stick with what I have.

[and-justice-for-all]

54. I am trying to refinance...I want that 4.0% interest rate..nt

[iris27]

56. HA! I'd love to, but we are upside-down by 30%!

Bought in Feb 2007 for $95k, county appraisal for real estate tax now says $65k. We've paid off about five grand in two years paying the standard payment plus $100 extra each month, so we owe roughly $25,000 more than the place is currently worth. Looks like we'll be living in our "starter" home for quite a while...

[superconnected]

73. Wow you are lucky you can get a house that cheaply... may I ask what state?

[fortyfeetunder]

62. Yeah. right after those #*$&#(#$* credit card companies trashed limits

even for the responsible more than minimum payment types. How can they get a refinance with their credit limit trashed?

Sorry Mr. President, this is one of those YMMV programs....

[Dappleganger]

70. The one thing which is guaranteed to stimulate the economy...

J O B S