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QUALIFY FOR HARP PROGRAM WITHOUT MORTGAGE BY FANNIE MAE OR FREDDIE MAC MAC

In 2012, the outstanding balance is $184,396. Part of each monthly payment pays down the principal and the interest.

The borrower's monthly payments are about $1,264.

A borrower took out a $200,000 mortgage in 2006 with a 6.5% fixed interest rate to be paid over 30 years.

Contained in that report is longer, in-depth analysis of large-scale refinance and two other frequently discussed policy options, reducing mortgage principal for borrowers who owe more than their homes are worth and renting out foreclosed homes. An expansion of this report appears in CRS Report R42480, Reduce, Refinance, and Rent? The Economic Incentives, Risks, and Ramifications of Housing Market Policy Options, by. This report provides a brief overview of policy proposals for the large-scale refinancing of mortgages for borrowers shut out of traditional financing methods. With the housing market seen as a locus for many of the economic problems that emerged, some Members of Congress propose intervening in the housing market as a means of improving not only the housing market itself but also the financial sector and the broader economy. Critics are concerned that further intervention could prolong the housing slump, delay recovery, and affect outcomes based on the government's preferences rather than market forces. The bursting of the housing bubble in 2006 precipitated the December 2007-June 2009 recession and a financial panic in September 2008. 3522 are commonly referred to as the “Menendez-Boxer” bills.

QUALIFY FOR HARP PROGRAM WITHOUT MORTGAGE BY FANNIE MAE OR FREDDIE MAC MAC

Congressional proposals for large-scale refinancing of Fannie Mae and Freddie Mac loans include H.R. President Obama, in his 2012 State of the Union address, proposed streamlining the existing program to refinance Fannie Mae and Freddie Mac loans and establishing a new mass refinancing plan for non-Fannie Mae and non-Freddie Mac loans. Although some financial institutions may lose investment income from refinancing, others could benefit from the increased business associated with refinancing. Some of the additional spending of borrowers may come at the cost of the financial sector. A mortgage refinance could lower a borrower’s monthly payment, freeing up more income for non-housing-related spending. In addition, refinancing has the potential to have a larger effect on the economy by stimulating consumer spending. Because refinancing generally helps borrowers who are current, it is unlikely to have a major effect on the housing market, but it may prevent some foreclosures that could occur in the absence of a refinance. Large-scale refinancing helps borrowers who are current on mortgage payments to refinance into a new mortgage with a lower interest rate. One frequently discussed proposal for the housing market is expanding the Home Affordable Refinance Program (HARP) to refinance mortgages for borrowers shut out of traditional financing methods. Critics are concerned that further intervention could prolong the housing slump, delay recovery, and affect outcomes based on the government’s preferences. With the housing market seen as a locus for many of the economic problems that emerged, some Members of Congress propose intervening in the housing market as a means of improving not only the housing market itself but also the financial sector and the broader economy.