President Obama hosted a roundtable discussion this morning in the Roosevelt Room about the impact of historically low interest rates. Attending the meeting were a handful of households who have re-financed their homes and benefited from lower mortgage payments, as well as members of President Obama’s economic team.
Our Financial Stability Plan will address the key problems at the heart of the current crisis and get our economy back on track. A critical piece of that effort is Making Home Affordable, a plan to stabilize our housing market and help up to 7 to 9 million Americans reduce their monthly mortgage payments through modifications or refinancing to more affordable levels.
As more and more American homeowners face difficulty making their mortgage payments, we are doing everything we can to help them lower their payments to affordable levels.
In many cases, falling home prices and disruptions in credit markets have limited borrowers’ ability to refinance, through no fault of their own. Our new Making Home Affordable refinance program targets those borrowers directly by giving borrowers with mortgages through Fannie Mae or Freddie Mac the opportunity to refinance even if their home has lost value.
More broadly, together with the Federal Reserve’s actions, our policies have helped to bring down mortgage rates to historic lows, giving millions of Americans the ability to refinance. A typical homeowner can now refinance and save around $2,000 a year.
Since the Administration’s housing plan was announced on February 18th:
• Rates on30-year mortgages have dropped to an all-time low of 4.78percent.
• Refinancing applications are up 88 percent (Mortgage Banker’s Association).
• Fannie Mae refinanced $77 billion of mortgages in March, nearly twice the February amount, and their highest volume in one month since 2003.
• Over 500,000 borrowers have accessed Fannie Mae online to learn about refinancing and Fannie Mae is now processing applications to complete refinancing for eligible borrowers.