The NY Times reports that President Obama has proposed new rules for federally guaranteed mortgages. The good news for homeowners battling tough economic times is that it will help to reduce the monthly mortgage payments of up to one million homeowners.
The changes affect those that have homes financed under Freddie Mac or Fannie Mae.
Via the NY Times:
The changes, which will take effect over several months, will let people qualify for new loans no matter how far the values of their homes have fallen, so long as they have made at least six consecutive monthly payments. The plan also will reduce borrowers’ fees, for example, by dispensing with the need for an appraisal in many cases and by automatically transferring mortgage insurance to the new loan.
More information on the changes are provided in the release from the Federal Housing Finance Agency regarding the Home Affordable Refinance Program (HARP).