<p>Re-write existing loans with newer lower interest rate. It would be nice to lower the balance too but just lowering rate would save owners $100s every month and hel them greatly as well as the economy. Just do it.</p>
<p>[News</a> Headlines](<a href=“http://www.cnbc.com/id/44269404]News”>US May Back Mortgage Refinancing for Millions)</p>
<p>I think it is a good idea…</p>
<p>"President Obama’s administration is weighing proposals to strengthen the housing market.</p>
<p>One proposal would allow millions of homeowners with government-backed mortgages to refinance them at todays lower interest rates, about 4 percent, according to two people briefed on the administrations discussions who asked not to be identified because they were not allowed to talk about the information.</p>
<p>A wave of refinancing could be a strong stimulus to the economy, because it would lower consumers mortgage bills right away and allow them to spend elsewhere. But such a sweeping change could face opposition from the regulator who oversees Fannie Mae and Freddie Mac, and from investors in government-backed mortgage bonds."</p>
<p>Sure, it will benefit greatly to those homeowners. But it will stifle the investment community. As a GNMA investor, I expected a long term investment and all of a sudderen I got cashed out and in some cases forced to pay taxes on gains. I would never reinvest in the same insturment again and there will be problems to unload the new security on the market unless the govenment eats it.</p>
<p>I know many people for whom this would help immensely. I agree, just do it.</p>
<p>All mortgage investments have risk including pre-payment which is legal under the contract. Your expectations are not our problem. Most mortgages are cashed out in just 7 years or so anyway and I would guess many of these loans are getting near that. Also the mortgage packages are repriced every day and many might prefer cash in hand over potential defaults.</p>