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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Nov 15, 2012

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President Obama’s reelection has led to speculation that his second term activities will push for more housing incentives that would lead to an increase in the borrowing of refinance loans. In the past, the Obama Administration’s policies have increased options for homeowners, allowing them to qualify for new home loans or refinance loans.

“The continuation of the policies that started last year or so are basically assured now,” said Vitaliy Liberman of DoubleLine Capital LP, according to Bloomberg.

The President’s past efforts led to the creation of new programs, such as the Home Affordable Refinance Program (HARP), which guarantees refinance loans for borrowers with little or no equity in their homes. HARP refinance loans reached new highs in October, exceeding the expectations of private lenders and the population as a whole.

Outside of refinance loan options for borrowers, the President is speculated by Bloomberg to consider replacing the acting overseer of Fannie Mae and Freddie Mac in order to make way for principal forgiveness on home loans. Forgiveness on debt would aid many borrowers whose homes are underwater or whose mortgages payments are too high.

Despite the President’s ongoing aid to the housing industry, Corelogic says that 10.8 million Americans still owe more on their mortgages than their homes are worth.

According to the Mortgage Bankers Association, it is estimated that 3.8 million home loans are 90 days delinquent. Worse still, the S&P/Case-Shiller Index shows that home prices remain roughly a third below their price peak level, which was reached in July 2006.

Still, some industry insiders feel optimistic about refinance loans and the industry’s eventual recovery.

“We’ve been through a very challenging time and there’s a lot of people still struggling out there. The administration is still very focused on helping homeowners, helping borrowers, putting more money in people’s pockets,” said Bill Roth, CEO of Two Harbors Investment Corp, according to Bloomberg.

Unfortunately, a downside to the President’s reelection is that Wall Street is none too pleased.

“Treasury rates are falling and primary mortgage rates may continue to fall as well. The market is concerned because Obama won—that he is going to be more inclined to provide refinancing relief to borrowers,” said Walt Schmidt of FTN Financial, in an interview with Bloomberg.

Refinancing relief may be welcomed by borrowers but lenders may scoff at yet another four years of increased regulations.