President Obama tries to sell America on mortgage refinancing

Nearly two months after first announcing his plan to stem foreclosures and rescue the housing market, President Barack Obama convened a "Housing Refinance Roundtable" at the White House to talk about the mortgage meltdown.

In a brief public statement, the president said the nation's economic crisis could partially be blamed on the housing market "because in some areas housing values got way overheated, in some cases you had a lack of regulation."

But, Obama added:

Here's the good news.  At the beginning of this administration we said we are -- we were going to tackle directly the problems that homeowners were experiencing and figure out ways in which we could provide them assistance in reducing their interest rates, modifying their loans so that they would be in a position to stay in their homes and reduce their monthly payments.  And around the table here you see some wonderful families who have taken advantage of what are now historically low mortgage rates, brought about in part by some extraordinary actions by the Federal Reserve, but also brought about by the housing plan that [Treasury Secretary] Tim Geithner and [Housing and Urban Development Secretary]Shaun Donovan helped to design.

The housing market, however, is still in a crisis. As the Consumer Reports Home & Garden Blog has written, about 7 percent of U.S. homeowners were at least 30 days late on their mortgage payments in February. That's a 50 percent jump from a year ago. The percentage of delinquent mortgages for people with subprime loans is significantly higher—almost 40 percent were at least 30 days behind on their loans in February.

Forty-five percent of existing home sales in February involved distressed-sale properties, including short sales and REOs (real-estate-owned properties).

President Obama advised homeowners to look into refinancing their mortgages to stay out of trouble or just to save a little money:

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 -- MakingHomeAffordable.gov -- and the way the web site is designed, you can plug in your information and immediately find out whether or not you are potentially eligible for one of these -- one of these mortgage refinancings.

To back up the president's call for refinancing, the White House released some statistics about the housing market since the president made his initial rescue plan announcement:

• Rates on 30-year mortgages have dropped to an all-time low of 4.78 percent.
• Refinancing applications are up 88 percent (Mortgage Banker’s Association).
• Fannie Mae refinanced $77 billion of mortgages in March, nearly twice the February amount, and their highest volume in one month since 2003.
• Over 500,000 borrowers have accessed Fannie Mae online to learn about refinancing and Fannie Mae is now processing applications to complete refinancing for eligible borrowers.

The president also brought up the growing danger of fraud.

"As people have become aware that the government is helping to promote refinancing, we're starting to see some scam artists out there who are contacting people saying, 'you can refinance your home, the government has got a program, we're ready to help -- oh, but by the way, first you've got to pay some money,'" Obama said. "I just want everybody who is watching today to know that if somebody is asking you for money up front before they help you with your refinancing, it's probably a scam."

That's just one of the tips to avoid a foreclosure fiasco which Consumer Reports offered in our March issue. Read the rest of our advice on how to avoid refinancing scams here.