Federal government announces assistance to “Underwater” Borrowers
The Federal Housing Finance Agency has removed several key barriers to the Home Affordable Refinance Program (HARP) in order to allow more underwater borrowers move into lower-rate mortgages.
HARP, which launched in March 2009, helped 893,000 Fannie Mae and Freddie Mac borrowers with loan-to-value ratios between 80% and 125% refinance. But roughly 7% of those held LTVs above 105%.
In order to assist more of the estimated 11 million borrowers who owe more on their mortgage than their home is worth, the FHFA removed the 125% LTV ceiling on the program.
This new program to help borrowers currently “underwater” with home values, like most government programs, will be limited in time and funds available.
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