Yesterday, the Obama Administration announced that the mortgage rescue program would now allow homeowners to refinance up to 125% of property value, up from 105%. This is a welcome change, even though it won’t help everyone. Nothing has been done to address the slow pace at which banks are processing applications.

This is an important development which will hopefully prevent foreclosures two ways. First, people who are unable to pay their mortgage and are somewhat (but not severely) “underwater” on their home value will be able to get refinanced. Second, it will give the opportunity for people who can pay their mortgage to take advantage of lower interest rates without walking away from their current homes — creating a completely needless foreclosure. It is unfortunately completely logical for families to take advantage of low rates and slashed prices, even at the expense of a lower credit score.

I’ll end with two hopeful tidbits: the NAR pending sales index has risen 4 straight months, and some evidence from an economist that prices have bottomed. Both these items are about the larger national housing market. My readers have seen these trends in place locally for some months. Don’t forget to watch the trend continue in Friday Figures tomorrow.