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White House weighs mass refinancing plan

The White House is considering a housing proposal that would allow millions of homeowners with government-backed mortgages to refinance into lower interest rates, The New York Times reports.

“A wave of refinancing could be a strong stimulus to the economy, because it would lower consumers’ mortgage bills right away and allow them to spend elsewhere,” an article in The New York Times notes.

Many homeowners have been unable to take advantage of today’s low interest rates — which are averaging around 4 percent — because they don’t qualify for refinancing at the best rates since they owe more on their home than it is currently worth or because of poor credit. The refinancing plan is still under discussion of how it would work, The New York Times said.

“This is the best stimulus out there because it doesn’t increase the deficit, it accomplishes monetary policy, and it reduces defaults in housing,” Christopher J. Mayer, an economist at the Columbia Business School, told The New York Times.

The White House is also considering other options to try to stimulate the housing market or save homeowners from foreclosure. Such options include more changes to its refinancing programs so more homeowners can participate or a home rental program to that would rent out foreclosures instead of putting them for sale so foreclosures would stop weighing down overall home prices.

“This is just want this economy needs! I was just saying I would love to refinance my home but after talking to Wells Fargo I was told they couldn’t refinance my home because my loan to value wasn’t within tolerance. I was looking to refinance to a 15 year mortgage to take advantage of the low rates. I do hope this gets through the White House. I could see this as a huge plus for most Americans, putting $150-$200 a month or more in their pockets.”