Obama looking to broaden access to mortgage refinancing

In an address to the nation Thursday night, President Barack Obama said his administration and federal housing agencies are working to enable more homeowners to refinance their mortgages to take advantage of the low rates. The plan would make changes and adjustments to the existing Home Affordable Refinance Program to eliminate refinancing costs and help more homeowners who are underwater on their mortgages refinance their loans.

According to Reuters, the goal of the new plan is to remove the barriers homeowners face with the current refinancing program. Despite the historically low interest rates, many homeowners are unable to refinance their mortgages due to strict lending requirements and home values plummeting below their mortgage value. Under HARP, homeowners can refinance up to 125 percent of their home's value if underwater, but senior financial analyst for Bankrate.com, Greg McBride, said that mortgage cap needs to change.

"125 percent is far too low to help homeowners in the hardest hit markets like Florida, Nevada and Arizona," McBride told U.S. News.

Those opposed to the new plan argue the changes would put Fannie Mae and Freddie Mac at greater risk of financial loss, but the administration believes helping homeowners refinance would strengthen the housing market and thus bolster the mortgage lenders, Reuters reported. 

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