The Obama administration announced Monday it is making a number of changes to its Home Affordable Refinance Program to help more struggling homeowners avoid foreclosure.
So far, eligibility requirements for HARP have been limited to homeowners who have been making on-time mortgage payments but have been unable to refinance at a lower rate due to declining home values. Under the new plan, the Federal Housing Finance Agency would expand eligibility requirements so homeowners with little to no equity in their homes would be eligible to switch to a lower rate.
More specifically, the plan would eliminate the current 125 percent loan-to-value ceiling for fixed-rate mortgages backed by Fannie Mae and Freddie Mac; waive certain representations and warranties that lenders commit to in making loans owned or guaranteed by Fannie and Freddie; eliminate the need for new property appraisals in some refinancing transactions; and extend the end-date for the program from June 2012 to Dec. 31, 2013.
The exact pricing details of the change will not be published until mid-November, and refinancing under the new terms will not start until December at the earliest. Homeowners with loans that exceed the current limit of 125 percent of the property’s value will not be eligible to refinance until early 2012.
The administration says the changes will help several million more families while helping to strengthen the economy.
I have also heard that Federal Reserve Chairman Ben Bernanke is expected to submit a list of legislative recommendations to Congress as early as this week on possible fixes to the housing market.
MICHAEL MCDEVITT 