Treasury Department representative Michael Stegman announced Tuesday in Las Vegas that President Obama and his administration intend to re-address the expansion of refinance options to current borrowers. A proposal brought to the Senate by President Obama last year allowing homeowners underwater on their loans to refinance will be revamped and re-introduced.
According to The Wall Street Journal the new proposal would allow underwater borrowers to obtain a reduction in rates via mortgage modification. The Journal stated “The proposal wouldn’t require legislation, and would allow borrowers to qualify for a reduced rate under the existing Home Affordable Modification Program, or HAMP.”
The HAMP currently sees qualifying borrowers as those who are at imminent risk of defaulting, which can be subjective. The updated proposal would clarify and define a qualifier of “imminent risk” as one who is considerably underwater in their current loan.
Mr. Michael Stegman in his Tuesday conference said “Legislation that gives these high-interest borrowers … the ability to refinance into lower-cost loans could be especially impactful…”