Obama refinance plan coming to fruition.

The biggest part of the Obama Administrations plan to solve the housing crisis is not the much ballyhooed loan modification program but instead the mortgage modification program for borrowers as much as 5% underwater on their first liens. With the Fed monetizing almost a trillion dollars in debt to keep mortgage rates low the plan is to get the people in the danger zone of default to commit to their homes and get a lower monthly rate. Major banks such as Wells Fargo and Bank of America have started refinancing under the plan, most just Fannie Mae loans for technical reasons but Freddie Mac loans will soon follow. For people with a Fannie Mae loan they can refinance through anyone, people with a Freddie Mac loan must refinance through their servicer to take advantage of the new program. You can find out which type of loan you have here.

Today President Obama encouraged people to refinance:

Mr. Obama urged Americans to take advantage of current low mortgage rates, so they can stay in their homes and spend more on other needs.
He estimated 7 million to 9 million people could refinance, saving $1,600 to $2,000 a year. "That is money in their pocket," he said. "We are at a time where people can really take advantage of this, and what we want to do is to send a message that if you are having problems with your mortgage -- and even if you're not, and you just want to save some money -- you can go to makinghomeaffordable.gov."

The printing presses are running to put dollars directly in the pockets of struggling homeowners following Professor Bernankes formula to stop deflation.