Help may be on the way. If this legislation being floated around Washington to remove the barriers that prevent homeowners from being able to refinance their homes currently at higher interest rate and/or adjustable loans into lower, market-rate loans (currently interest rates hover around 4%). To many it’s the difference between staying in your home and (or being able to move up/down, or out of the area for that matter) and staring down that proverbial road to short sale or foreclosure that millions of other Americans are struggling with.
Being that next year is an election years and the powers that be want to keep their jobs, there will be tons of pressure for action one way or another. I for one, will be watching eyes glued to see how this played out. The net effect is that this could genuinely jump start our recovery which has been stagnant at best for the last several years.
The biggest hurdles, the banks and their investors, will surely not want to eat even more losses on many of these loans but given the choice between taking lower interest rates on principle balances or taking write-offs for years to come on securities that will underperform or all-out defaults may not be a great option either… I guess we’ll watch and see.
Here’s the link to the article: senators-call-for-immediate-action-to-help-homeowners-refinance-2011-10-12