Will Obama's latest mortgage refinance plan help you?

President Obama on Monday announced new measures to help borrowers refinance their existing mortgages to new loans with lower interest rates and cheaper monthly payments.

The plan is an expansion of an existing program to help borrowers who are not behind on their payments but cannot refinance because they do not enough equity in their home. Or they might be underwater--which means they owe more than their home is worth.

"Right now, some underwater homeowners have no choice but to refinance with their original lender - which some lenders refuse to do," Obama said in prepared remarks.

"These changes will encourage other lenders to compete for their business by offering better terms and rates, and eligible homeowners to shop around for the best ones," he added.

But how many homeowners will it really help? And will it be enough to jumpstart the still struggling housing market?

Dean Baker is the Co-Director of the Center for Economic and Policy Research here in Washington, spoke with CBS News and said if 800,000 borrowers are able to refinance, that would be "very good."

That would be a big help to those borrowers, but probably not enough to make much of a difference in the overall economy, he added.

Despite the relatively modest effect, Mr. Obama and his team recognize the president needs to be seen on television everyday as someone "trying to solve problems, said Larry Sabato, a politics professor at the University of Virginia.

"It's a smart approach and long overdue," Sabato said, noting that the administration is "out of time" as the presidential election is just a year away.

MoneyWatch: More details on Obama's new plan

"They realize that Obama probably can't get a Mother's Day resolution passed through Congress," so he has to move ahead with incremental measures that help pockets of Americans.

Housing analyst Edward Pinto stressed that the plan would mostly help borrowers who owe less than their mortgage, despite the repeated talked from White House officials that it is aimed at so-called "underwater" borrowers.

"I think it's important not to get expectations up too high," said Pinto, a fellow at the conservative American Enterprise Institute and a vocal critic of Fannie Mae and Freddie Mac, the two government sponsored entities that are backing the loans eligible for refinance under the Home Affordable Refinance Program (HARP).

Pinto noted close to a million borrowers have gotten a HARP refinance loan since it was introduced two years ago, but only about 100,000 of them were borrowers who owed more than their house is worth. Without the HARP program, borrowers would have to owe less than 80 percent of the loan's value to refinance, so the majority of borrowers who got new HARP loans were in that 80 to 100 percent range, Pinto said.

Even with the expanded program, "they are not going to help a million" more underwater borrowers, Pinto added.

[jordanwest444]

This is a very good question. I'm pretty nervous about my <a href="http://www.reallylowrate.com">refinance mortgage rates in california</a>. Do you know how I can make sure everything turns out?

[willow240]

I'm 71 and can barely make it and called my lender and they said I'm eligible for this program. Thank you, President Obama for the Harp Program, it just saved me over $200 on my mortgage payment every month! That's $200 I now have to buy things I haven't been able to afford, like clothes, getting some repairs done, etc. I will be helping the local economy, so I can't see how this is not a good deal for more than just me. If more people had it they also could contribute to their local economies.

[chill4me]

Nope, already behind in payments, credit shot a couple of years ago trying to hold on to house, all other programs I applied for I got no response each time

[lgoglia]

Once again Americans are being duped into thinking that help is on the way for the refinancing of their home. The only way the economy will really start to make a firm recovery is to solve the real estate problem. The current refiancing plan is a band aid on the real problem which property valuation. Unless the government includes reducing the face value of the principal loan amount to the "Fair market value"' of the property as well as the interest rate, real estate will continue to struggle. Why would anyone agree to refinance their exising home with an over inflated price that is overvalue by at least 30%. Just think of the impact it would have on the economy if the government would actually do the right thing for a change.

Louis Gabriel,DBA,LLB
Retired Real Estate Broker

[jeep054]

It would be better for many if Congress and the President would pass legislation allowing people over 55, or 60,, or even 65 to take out some of their 401K money just to pay off mortgage debt tax free. That should not hurt the tax rolls much, but would allow many to have more spendable cash with no, or much less monthly mortgage payments.

[Overturn_legallized_theft]

This plan does nothing for new buyers. The banks refuse mortgages for less than 50K if you find a cheap forclosure and don't have all cash. When I contacted my bank for preapproval the loan officer assigned to my application was in another state 2,000 miles away and her hours 6-3 so she could do business eastern time and pacific time. When I tried to contact her she left that day at noon. The banks don't want to be bothered by small affordable home loans when jumbo loans pay them more in fees.

[gep1955]

No it won't help. It only applies to people who have loans through Fannie and Freddie. Government agencies administering government loans through banks now controlled by the government so money can be siphoned off to help government grow even more. Disgraceful.

[SueDeaunym]

When the Obama mortgage rescue plan was first revealed, I went to my mortgage company and asked to participate. They indicated nothing was different in their programs and policies. I began clicking online links offering an Obama mortgage, and every one led to some exploitative refinance scam. I gave up after several weeks.

Now, here is a new and improved Obama mortgage plan. I'm all for it, but I'm wondering: how I can actually participate?

[Resin-Smoker]

I can tell you from experience that most homes in my area (NE Florida) are at 75-90k underwater and while refinancing would lower the overall monthly payment a small bit, by the time fees are figured into the equation it doesn't amount to much.
So far the only ones why win in this deal are the banks as they've most likely a federal backing on a new 30 year mortgage on a property they'd never be able to short sell. Hence, unless the finance package includes a re-assessment of the properties current market value very little is to be gained by refinancing your home.
Anyways.... Good luck trying to get your bank to agree to this.

[buffaloroad7]

What a collasol joke! First of all NO financial institution will lend on any property that is upside down and guess what, they don't have to! Also, Obama's first huge failure at attempting to help has made homeowner's situations worse. First, in order to qualify for remodification you have to be at LEAST 2 months behind, then you are required to send in an endless stream of documentation that they will NEVER respond to. Chase had our COMPLETED remodification app for over 1 year and stated each and every month that a rep was working on it. Yet, after 1 year they stated that we would have to travel over 10 hours to a place where thousands of applicants will show up and hope to be seen. Now, those people who really need help and are and were delinquent have absolutely no prospect of qualifying for this new piece of garbage because they credit is ruined. Obummer has wrecklessely thrown out another piece of garbage!