President to Announce Reduced FHA Refinance Fees

Today President Barack Obama will announce plansrnto allow homeowners with FHA insured loans refinance at lower rates and willrnalso detail an agreement with major lenders that will compensate militaryrnpersonnel and veterans who were wrongfully foreclosed upon or denied lowerrninterest rates.</p

Thernreport, from unnamed senior administration figures speaking on the condition ofrnanonymity, said that the President would make his announcements at the firstrnfull press conference he has held since November, scheduled for this afternoon.rn </p

Obamarnis reported ready to announce that refinancing fees for FHA insured borrowersrnwould be cut in nearly in half from the current 1.15 percent of the outstandingrnloan balance to .55 percent.  At therncurrent interest rate of 4 percent the AP said this would lower the monthlyrnpayment of a borrower with a mortgage balance of $175,000 by about $100 a month.rn  Unlike programs announced in the Staternof the Union and subsequent presidential speeches, this is an action thernPresident can take without Congressional approval.   Withoutrntaking into account borrowers who are underwater on their mortgages, anrnestimated 2 to 3 million borrowers might be eligible for this refinancing.</p

PresidentrnObama is also expected to announce that major lenders have agreed to reviewrnforeclosures to determine if they were done property.  If not, military-connected borrowers would bernpaid their lost equity and be entitled to an additional $116,785 inrncompensation, a figure reached through an agreement with the lenders, thernfederal government, and 49 of the state attorneys general.  The lenders would also compensate servicernmembers who lost value in their homes when they were forced to sell them due torna military reassignment.</p

Highlights
-FHA says 2-3 million borrowers will benefit from premium cuts
-The typical FHA borrower will save $1000 per year
-Annual fee for refis will be cut to 0.55% 
-FHA refi upfront premiums reduded from 1.15%
-FHA cuts upfront premiums for streamlined refis to 0.01%
-Reduced refi premiums for loans originated before June 1, 2009

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White House Fact Sheet on FHA Refi Fee Changes: http://mndne.ws/zXiiWA

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