US announces help for underwater homeowners

http://bottomline.msnbc.msn.com/_news/2011/10/24/8465654-us-announces-help-for-underwater-homeowners?GT1=43001

A leading housing regulator on Monday announced changes to a government refinancing program that could help up to one million homeowners of the estimated 11 million whose homes are worth less than their mortgage.

The Federal Housing Finance Agency, which oversees mortgage finance sources Fannie Mae and Freddie Mac, said it was easing the terms of the two-year-old Home Affordable Refinance Program, which helps borrowers who have been making mortgage payments on time but have not been able to refinance as home values have dropped.

To help underwater borrowers, or those whose loans are worth more than their homes, FHFA said it will scrap a cap that prohibits any homeowners whose mortgage exceeds 125 percent of the property’s value from participating in HARP, which is targeted at loans backed by Fannie Mae and Freddie Mac.

“Our goal in pursuing these changes is to create refinancing opportunities for these borrowers, while reducing risk for Fannie Mae and Freddie Mac and bringing a measure of stability to housing markets,” FHFA’s acting director, Edward DeMarco, said in a statement.

After meeting with DeMarco earlier this month, one lawmaker said the expanded program could help as many as 600,000 to one million borrowers. But that is only a fraction of the estimated 11 million homeowners who are underwater.

President Barack Obama is expected to promote the initiative during a speech Monday in Las Vegas. Obama will also use the trip to raise money for his re-election campaign.

But even the White House is uncertain about how many homeowners it could help. White House economist Gene Sperling said Monday it was too early to project how many struggling borrowers would “benefit from the changes announced today or could be announced in the future.”

The New York Times reported Monday that the initiative was part of a program the president would be rolling out to address the nation’s economic woes in the face of congressional Republicans’ reluctance to pass his jobs pla

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Posted by Eastlaketimes on Oct 25 2011. Filed under Business News in Chula Vista, Real Estate. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry