Oct. 25 - Long Island homeowner Magalene McClarrin owes more than her house is worth and hopes to benefit from a new government plan that could help homeowners like her refinance. Bobbi Rebell reports.
Magalene McClarrin has loved living in her home on Long Island, New York since she bought it for about $160,000. Now, 16 years and two refinancings later, she's paying 10 percent on a mortgage close to $400,000. She'd love to refinance to a lower rate. But she can't. The house is valued at just $288,000 according to the local government's appraisal. SOUNDBITE: MAGALENE MCCLARRIN, HOME OWNER (ENGLISH) SAYING: "It's scary. It is. It's difficult because I know my house. This is a lovely home and to be worth so little and owe so much. I'll never get out from under it." She is one of the many who could benefit from an expansion of a program announced by the Obama administration. The plan will allow government backed mortgage agencies Fannie Mae and Freddie Mac to refinance homeowners even if their mortgages are more than 25 percent above their homes' value. REPORTER STANDUP: BOBBI REBELL, REUTERS REPORTER (ENGLISH) SAYING: "In neighborhoods, like this one, across the United States the numbers are dramatic. An estimated 11 million homeowners are locked into mortgages worth more than their homes. And while this plan has the potential to help some homeowners- critics say its benefits are too limited. Bruce Marks is the head of the non-profit Neighborhood Assistance Corporation of America or NACA. SOUNDBITE: BRUCE MARKS, CEO, NEIGHBORHOOD ASSISTANCE CORPORATION OF AMERICA (ENGLISH) SAYING: "It is a good first step but remember we are almost into the fourth year of the Obama administration so to have the first step almost at the end of the first term is disappointing. But it is a good first step out there to help people who are current on their mortgage to reduce their mortgage payments by a couple hundred dollars every month." But McClarrin is hoping it will work for her. Overwhelmed with debt from helping relatives, and poor credit, she is frustrated. SOUNDBITE: MAGALENE MCCLARRIN, HOME OWNER (ENGLISH) SAYING: "I'm angry that it's come to this and part of that anger is at myself because I am partly responsible for this. Not the entire economy but I am responsible for my part in being in this situation. But it does not mean that people like myself can't get help. Help that could ease the burden of countless Americans and begin to pull the housing market out of its multi-year slump. Bobbi Rebell, Reuters.