Pleasanton Real Estate

Obama pitches refinance plan for homeowners

President Obama on Thursday touted his administration’s efforts to lower mortgage rates in a round-table discussion with Washington, D.C.-area homeowners who have benefited from refinancing into more affordable loans.

NANCY STONE / MCCLATCHY NEWSPAPERS

President Obama meets with Treasury Secretary Timothy Geithner and homeowners on Thursday during a housing-refinance round table at the White House.

WASHINGTON — President Obama on Thursday touted his administration’s efforts to lower mortgage rates in a round-table discussion with Washington, D.C.-area homeowners who have benefited from refinancing into more affordable loans.

Their stories were intended to serve as testimonials for the masses who have not called a mortgage broker, whether they are in danger of foreclosure or simply looking for extra money.

Applications for refis have increased 88 percent since February, according to the Mortgage Bankers Association. And Fannie Mae, a mortgage-financing company, has said its refinancing volume jumped to $77 billion in March, twice the level of the previous month.

“The main message we want to send today is that the programs that have been put in place can help responsible folks who have been making their payments, who are not looking for a handout, but this allows them to make some changes that will leave money in their pockets and leave them more secure in their homes,” Obama said.

Obama said new housing programs would be presented soon, following last month’s plan to provide $275 billion to help distressed homeowners, of which $75 billion would subsidize the mortgage industry to help borrowers avoid foreclosure. But he offered no details Thursday.

The refinancing boom has been fueled by lower mortgage rates. The average rate on 30-year fixed notes was 4.87 percent Thursday, slightly higher than the 4.78 percent last week. Still, it was the lowest level since 1971, which the president used to bolster his two-pronged argument for why refinancing is so important.

First, families will have more money to spend, which will boost the economy. If that happens, home values likely will rise, which will begin rehabilitating the beleaguered housing market that contributed significantly to the economic collapse.

Despite the uptick in refis, the administration’s housing program has yet to have a significant impact, and homeowners with jumbo mortgages still struggle to take advantage of lower rates.

Obama’s focus was intended simply to draw attention to a government Web site that tells people if they are eligible to refinance their mortgages.

“We hope that everybody takes advantage of it. The Web site is makinghomeaffordable.gov — is that right?” Obama said, repeating the address five times in five minutes. “So get on the Web site, find out what’s available.”