 The Obama administration has announced a plan to reduce the amount some troubled borrowers owe on their home loans.
The multifaceted effort will allow people who owe more on their mortgage than their property is worth to get a new FHA-backed loan. The plan would also enable the borrowers' existing mortgage companies to receive incentives to lower principal balances.
To be eligible for the FHA refinancing program, borrowers must not have fallen behind on their existing mortgage payments. Separately, the program also would reduce monthly payments for unemployed homeowners for up to six months.
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What Are Mortgage Rates Doing?
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Conventional 30-year fixed mortgages are available at 4.75% today for well-qualified consumers paying a standard .07 to 1 point, says rate research website FreeRateUpdate.com. 30-year fixed jumbo loans are available at 5.625%.
Mortgage-backed securities prices, which drive mortgage rates in the opposite direction, have been flat in the month of March. As a result, mortgage rates have been stable.
The Fed says ideally the end of government MBS purchasing, set for March 31st, will cause only a slight rise in mortgage rates.
See the Rates
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