The Federal Housing Finance Agency (FHFA) is working with President Obama to make it easier for at least 1 million underwater homeowners to refinance into lower-cost mortgages.
Regulators are revising the Home Affordable Refinance Program (HARP), in order to help more homeowners who are current on payments but don’t qualify for refinancing. About 11 million people are underwater and nearly 40% of them are paying rates above 6% – these changes would allow more homeowners to refinance to a lower rate.
Here are three ways these changes will help homeowners hoping to refinance:
• Decrease loan fees for borrowers who want to refinance
• Remove the cap on how much borrowers can owe – it will no longer matter how underwater a borrower is
• Reduce fees borrowers must pay for appraisals and transferring mortgage insurance
Again this program will benefit many homeowners, as long as they are current on their mortgage payments. Due to that last statement, many people in the industry are saying that though this is a positive step in the right direction, more work needs to be done to help more people, as these changes to HARP would have no benefit to those many families who have fallen behind on their payments.
So although there is still work to be done, these are welcomed changes, which will provide more availably to a program created to help millions of homeowners struggling in the wake of the housing meltdown. Making more borrowers eligible to refinance their mortgage by enhancing and making changes to this program should give a boost to consumer confidence and enable more home owners to take advantage of current great low rates.
According to the government’s press release, pricing considerations for the new HARP program will be released on or before November 15, 2011; and lenders are expected to be offering the program as of December 1, 2011. The end date for HARP has been extended until December 31, 2013.
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