Paulson Looking for New Ways to Lower Mortgage Rates

Many mortgage insiders hope that the government jumps on board with the mortgage relief that has been promoted by Sheila Bair’s FDIC loan modification plan the renegotiates the mortgage balance to be reduced to 38% of the borrowers income versus the housing expenses.  This will help millions of distressed homeowners avoid foreclosure and remain in their homes at monthly mortgage payment that meets their budgets.  FHA loan programs rolled out Hope for Homeowners last month, but there have been some obstacles with FHA’s short refinance programs, but HUD maintains their commitment to making the needed changes to help stop the foreclosure crisis.

According to a Reuters article today, U.S. Treasury Secretary Henry Paulson said the Bush administration was looking at ways to lower mortgage rates because it was essential to stem the drop in home prices to foster an economic recovery.  ‘I’m the sort of person that’s always looking at new ideas … the key thing to getting through this period is having the decline in housing prices slow down,’ Paulson told CNBC television. ‘And a big part of that is going to be home loan availability and affordability of mortgage rates.’  

Yahoo! Buzz reported today, ‘We’re continuing to look at — and we wouldn’t be doing our jobs if we didn’t look at other ideas to reduce mortgage interest rates,’ he said.  Paulson added, however, that the Bush administration did not ‘float’ a plan to lower mortgage rates to 4.5 %.   ‘We didn’t float any plan, there was a leak about something,’ he said.  

Will the Fed Dropping Key Rates Help Mortgage Rates?  What Are Common Myths Regarding Fed Rate Cutes? 

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