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White House Rolls Out New Home Lending Plan

President Obama unveiled a plan to help homeowners resurface after going "unde

President Barack Obama on Monday announced a plan to assist homeowners who have found themselves saddled with homes that are worth less than the mortgages they took out to pay for them.

The Home Affordable Refinance Program aims to create a means for people to refinance those loans,

President Barack Obama on Monday announced a plan to assist homeowners who have found themselves saddled with homes that are worth less than the mortgages they took out to pay for them.

The Home Affordable Refinance Program aims to create a means for people to refinance those loans, getting a lower interest rate that helps them recover and make faster progress on paying down the mortgage.

Forbes points to a study from Corelogic, which put the number of homeowners who were "underwater" with their loans at 10.9 million as of Q2 2011. The program has drastically scaled back the number of people it will be able to assist - so far, 822,000 people have refinanced through HARP. Originally, the federal government wanted to prevent 5 million people from being pushed from their homes due to foreclosure.

According to the source, the redesigned strategy does away with the cap on which underwater homeowners qualify for help. Previously, HARP drew the mark at 25 percent. Additionally, "major mortgage insurers have agreed to automatically transfer coverage from the old loan to the refinanced loan," Forbes said.

The National Association of Home Builders applauded the announcement. "Making more borrowers eligible for refinancing their mortgages by enhancing the Home Affordable Refinance Program (HARP) will give a badly needed boost to consumer confidence," stated the NAHB chairman, Bob Nielsen.  

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