The Hill News

The plan reportedly supported by the Obama administration to force Fannie Mae and Freddie Mac to reduce interest rates for millions of homeowners would mean that some homeowners get government help while their more responsible neighbors do not. 

It would in effect be a backdoor stimulus, one involving pushing taxpayer cash out the door without a vote of Congress. And there is little reason to think it would be much more effective than the fiscal stimulus to date. 

The proposal is to strong arm Fannie and Freddie’s independent regulator into allowing the two government-controlled mortgage insurance firms to weaken refinancing guidelines. Millions of homeowners who remain current on their mortgages but do not qualify for a loan under more rigorous post-bubble standards could see their interest rate reduced from, say, 6 percent down to 4 percent.  This amounts to a $366 monthly saving on a $300,000 mortgage.

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