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Thursday, October 27, 2011

President Obama plans to use executive authority to revamp student loan, home refinancing programs

United States President Barack Obama signs int...                           Image via Wikipedia
Millions of student loan borrowers might be eligible to lower their payments and consolidate their loans under a plan President Barack Obama intends to announce Wednesday, October 26th.

President Obama will use his executive authority to provide student loan relief by accelerate a measure passed by Congress that reduces the maximum repayment on student loans from 15 percent of discretionary income annually to 10 percent. 

The White House wants it to go into effect in 2012, instead of 2014. Additionally, the remaining debt would be forgiven after 20 years, instead of 25. About 1.6 million borrowers could be affected.

The second part President Obama's signing authority to revamp student loans payback, would allow borrowers with loans in both the Family Education Loan and Individualized Direct Loan Program from the government, to consolidate them into one loan. The consolidated loan would save borrowers a half percentage point and impact 5.8 million borrowers.

President Obama would also use executive order authority to reduce home foreclosures by announcing a plan involving the Federal Housing Finance Agency (FHFA). 
Under the plan introduced by the President Las Vegas, NV on Monday, October 24th, President Obama would authorize the FHFA to reduce interest rates on mortgages for those who make their payments on time.
Specifically, it modifies the government’s Home Affordable Refinance Program –also known as the Making Home Affordable Program (HAMP)- to expand eligibility for those whose property values have fallen below the remaining balance of their loan.
“We know that there are many homeowners who are eligible to refinance under HARP and those are the borrowers we want to reach,” said FHFA Acting Director Edward J. DeMarco.
U.S. Congressman Hansen Clarke (D-Detroit), is scheduled to appear Sunday, November 13th on Reach Out Job Search Radio (ROJS-R), highlight his upcoming legislation to reform student loan debt. Interested listeners can tune in to hear Congressman Clarke ideas live, on ROJS-R starting at 11:00 AM.

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