Obama Heads to Nevada to Claim Progress on Housing
(LOS ANGELES) -- President Obama on Friday will visit a Reno, Nev., neighborhood hit hard by the housing crisis to hail a success story in his efforts to turn things around.
Six months ago, from the porch of a Las Vegas home 400 miles away, Obama announced administrative changes to federally-backed mortgage programs to help some struggling homeowners refinance at historic low rates.
The administration now says the move has had a “significant impact on responsible homeowners looking to refinance,” citing a huge influx in refinancing applications and savings on monthly payments for those who are approved.
In Nevada, where 60 percent of homes are underwater -- more than any other state in the country -- refinancing applications are up 236 percent since the changes Obama implemented in October, according to the Mortgage Bankers Association, which tracks the data.
Nationwide, the number of applications by homeowners seeking to refinance their mortgages is up 50 percent over the period, the group says.
Obama will meet personally with two homeowners who have been part of the trend -- Val and Paul Keller of Reno -- whose underwater mortgage had previously not been eligible for refinancing, despite their keeping up with monthly payments on a $168,000 mortgage they’d held for 14 years.
Thanks to changes implemented by the administration, the Kellers were able to refinance last year, saving them $240 a month.
“One of the most effective things that we can do to help more homeowners get back above water -- which can boost our economy and create jobs -- is to help them accelerate the pay-down of their mortgage through a new lower interest rate,” said Housing and Urban Development Secretary Shaun Donovan.
It’s unclear, however, whether the influx in refinancing applications Obama plans to hail is directly attributable to actions by his administration. Equally uncertain is whether the majority of those applications are even approved by the lender to result in savings for homeowners.
Neither the administration nor the Mortgage Bankers Association could say how many homeowners have been able to refinance under the new rules as the Kellers have. And experts conceded that more applications do not necessarily translate to lower rates.
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