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New Help to Refinance your Mortgage? The Presidents Plan

September 13, 2011

“Actions speak louder than words.” There were certainly important words spoken last week by President Obama. Read on to learn what he said, and what the impact could be on home loan rates.

Last Thursday, President Obama proposed a $447 Billion Job Stimulus Plan, which was larger and broader than most had expected. The program calls for tax cuts, state aid, infrastructure spending, on the job training, plus some surprises like tax cuts for small businesses to encourage hiring and a “Helping More Americans Refinance Mortgages” or HARP plan. There are no details to the HARP plan as of yet, as the President has just instructed his team to work with Fannie Mae and Freddie Mac, the Federal Housing Finance Agency (FHFA) and lenders to develop the plan. I’ll be sure to keep you posted as more details emerge on this plan.

Only time will tell how much of the President’s plan will only be talked about… and how much will be put into action that will make a difference. But one thing is for sure: With 400,000 plus brand new people still filing for first time unemployment benefits every week, action is definitely needed to create jobs. Plus, when you factor in the 3.7 Million people still collecting some sort of benefits, it’s no wonder why consumer confidence and demand is starting to revisit levels seen in the midst of the financial crisis back in 2008.

So what could all of this mean for home loan rates? Some of President Obama’s plan does indeed appear to be stimulative in the short run, and anything that helps growth would be bad for Bonds and home loan rates longer-term. However, in the short term, Bonds—including Mortgage Bonds, which home loan rates are tied to—are benefitting from the continued credit crisis in Europe, as investors see our Bonds as a safe haven for their money. The bottom line is that home loan rates remain near historic lows, which makes this a great time to purchase or refinance a home. Again, if I can answer any questions at all for you or your clients, call or email me anytime.

For more home loan information, please contact
Alan World
Gem Mortgage
Office: 714-569-3636

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