who hope to refinance existing mortgages that are "underwater" just
got a reprieve that will allow them another year to do so. The Federal Home Financing Agency announced
Monday that its Home Affordable Refinance Program (HARP), which was originally
set to expire on June 30, 2010, will be extended to June 30, 2011.
part of the Making Home Affordable Program, is designed to expand access
to refinancing for otherwise qualified borrowers who cannot move into more
affordable mortgages because of a lack of equity in their homes. Unlike other homeownership assistance
programs, HARP guidelines are designed for borrowers who are current on their
mortgages. The program was originally
designed to help homeowners with a loan-to-value (LTV) ratio up to 105 percent
including those with some equity but not enough to refinance without private
mortgage insurance. Last October that
LTV figure was revised upward to 125 percent.
FHFA Director Ed DeMarco said that "FHFA has reviewed the current market
situation and the state of mortgage insurance availability and has determined
that the market conditions that necessitated the actions taken last year have
not materially changed. Accordingly, to
support and promote market stability, and to encourage lenders and other
mortgage market participants to fully adopt the HARP program...FHFA is
authorizing the extension of HARP until June 30, 2011."
of the HARP comes less than a week after President Obama announced his
administration would infuse $1.5 billion in stimulus funds into state housing finance
agencies in states that have suffered a dramatic drop in housing prices coupled
with higher than average unemployment.
The funds, under the moniker 4HM for Help for the
Hardest-Hit Housing Markets, will be used to help unemployed homeowners avoid
foreclosure and for refinancing homes where the homeowner no longer has equity.
A major concern during the housing downturn has been the potential of massive
numbers of homeowners walking away from homes in which they no longer have a
Fannie Mae and Freddie Mac purchased or guaranteed more than 4 million
refinanced mortgages. Of these, 190,180
were HARP refinances with LTVs between 80 percent and 125 percent.