Free Refinancing

There was another news I heard on NPR recently about a proposal by Fannie Mae and Freddie Mac to do a blanket refinancing of all the mortgages they hold in order to reduce the monthly payments of those homeowners. The adminstration is wanting the banks to reduce loan payments to a lot of distressed homeowners and this hasn't happened in practice as refinancing requires paperwork and adhering to the new credit standards set up by the banks (like need to have a certain equity in the home to qualify for the lowest mortgage rates!) and the distressed homeowners won't be able to make it thru the process. So this new idea of blanket refinancing - the homeowners would get a sheet of paper saying that their loans will be modified to the new rates and all they have to do is to sign the paper. This is like giving free money to a certain section of the population and is highly unfair to non-homeowners. This is a selective cash distribution to a group favoured by the adminstration and fails the fairness test of policies in a big way. and I don't know the number of homeowners that would benefit from this. Any MBS security held outside Fannie and Freddie wouldn't be able to go thru this process -that's what I think.