In State of the Union Speech, Obama Talks Mortgage Rates

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President Barack Obama, in his first State of the Union speech since winning re-election said the federal government needs to streamline mortgage rules that are preventing many creditworthy buyers from purchasing a home. The same rules are also making it harder for creditworthy homeowners from refinancing their existing loan to a lower mortgage rate.

Even though mortgage rates today are just above record lows, millions of people can't take advantage of low rates. Current 30 year conforming mortgage rates are averaging 3.66 percent and the lowest mortgage rates available on 30 year loans are around 3.00 percent to 3.25 percent.
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Obama said, "Part of our rebuilding effort must also involve our housing sector. Today, our housing market is finally healing from the collapse of 2007. Home prices are rising at the fastest pace in six years, home purchases are up nearly 50 percent, and construction is expanding again."

He continued to say, "But even with mortgage rates near a 50-year low, too many families with solid credit who want to buy a home are being rejected. Too many families who have never missed a payment and want to refinance are being told no. That’s holding our entire economy back, and we need to fix it. Right now, there’s a bill in this Congress that would give every responsible homeowner in America the chance to save $3,000 a year by refinancing at today’s rates. Democrats and Republicans have supported it before. What are we waiting for? Take a vote, and send me that bill. Right now, overlapping regulations keep responsible young families from buying their first home. What’s holding us back? Let’s streamline the process, and help our economy grow."

The President makes valid points on mortgage rates, housing, and the economy. There are millions of homeowners who do not have enough equity in the home to refinance their loan. Current refinance rates on 15 year conforming loans are averaging 2.91 percent and there are lenders quoting 15 year refinance rates today as low as 2.25 percent with points.

There are bills pending in Congress that if passed, would help these homeowners refinance. The "Responsible Homeowners Refinancing Act" that was written by Senators Robert Menendez (D-N.J.) and Barbara Boxer (D-Calif.) would allow homeowners to streamline refi's of Fannie Mae and Freddie Mac loans.

If millions of people were able to refinance and save $3,000 a year, this would be a boon to the economy, increasing disposable income for people and thus, creating jobs which are sorely needed. You can watch President Obama's State of the Union Speech on housing and mortgage rates here:

 
Author: Brian McKay
February 14th, 2013