On 28 Sep 2011
Refi and "stimulating the economy",
Agree with some of the other posters here. REFI, "in general" can / will increase cash flow which COULD be used to: either reduce other debt (think credit card, auto loans, etc.), increase savings, or buy "stuff".
The "buy stuff" option is what the policymakers are hoping for since approximately 70% of the U.S. economy is based on consumer spending. So, in simplest terms; if you increase conusmer spending, you increase the GDP (economy) which helps reduce unemployment among other benefits.
That said, one or more of the posters also mentioned that most of these REFIs would go with a 30 year new mortgage term. Not only does this extend a home debtors time to maintain the new debt, but also INCREASES the initial loan amount if they wrap closing costs (title search, title insurance, loan origination fee, county tax stamp, county recording fee, credit check, property appraisal, etc.). REFIs are not free! Who makes the money on these "transaction" fees? Yep you guessed it: the HOUSING MAFIA (mortgage brokers, appraisers, mortgage companies, title insurance companies, etc.).
Perhaps a better option would be to offer us home debtors an interest rate reduction on our existing mortgage without a full refinance. Basically a payment re-adjustment (like a variable rate loan that is adjusted). This would still reduce the monthly payment amount while eliminating the typical REFI fees and would not change the number of outstanding months of the original mortgage.