President Obama is doing an end run around Congress with a new strategy to target one of the most crucial sectors of the U.S. economy, and one clearly in need of serious resuscitation — the mortgage market. This first installment of Obama’s proposed economic rehab program, which he dubbed the “We Can’t Wait” campaign, is designed to help some struggling homeowners renegotiate their mortgage terms beginning around December. Whether it’ll make a significant dent in a systemic problem that needs nothing short of a major intervention, however, remains to be seen. Here are a few of the details about the Federal Housing Finance Agency’s revamped plan.

The Washington Post:

The FHFA’s new rules slash fees for borrowers looking to refinance. And while in the past only borrowers who owed up to 25 percent more than their properties were worth could take part in the program, now there will be no cap on how much a borrower can owe.

Only loans that are guaranteed by Fannie Mae and Freddie Mac will be eligible. Borrowers must check with their lender or Fannie or Freddie to see whether they are eligible. Borrowers also must be current on their mortgage and not have made a late payment in the past 12 months.

To avoid all fees, borrowers, many of whom have 30-year mortgages, will have to take out a new mortgage of 20 years or less. That will mean that homeowners have fewer years to pay off their total balance, largely offsetting whatever they might be saving by taking advantage of today’s low mortgage rates. The plus side is that borrowers will pay off their mortgages more quickly.

On the other hand, if borrowers pay fees, they will be able to get a 30-year mortgage at the new low rates. That could potentially lead to $200 in savings per month.

One unknown is whether the fees will prevent borrowers from participating. FHFA is to publish final details in mid-November.

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