The HARP(Home Affordable Refinance Program) simply has not worked in helping many homeowners and President Obama is expected on Monday to announce “new policies” to help struggling homeowners, including a move that would allow borrowers to refinance their mortgage at current lower rates no matter how much their home values have dropped.
Fannie Mae and Freddie Mac are also expected to end a cap that excluded home owners from HARP who had mortgages that were higher than 125% of the homes value. This cap left many homeowners with little option because they simply do not have enough equity in their properties. The plan is expected to eliminate ” appraisals and extensive underwriting for most borrowers” whpo are up to date on their mortgages and want to refinance at lower rates.
Obama is also expected to announce a reduction in Fannie and Freddie loan fees. Lenders could start refinancing as soon as December 1st, however some may have to wait until early next year due to their loan-to-value limit.
Housing experts believe that allowing underwater home owners to refinance at current lower rates could be a savings of hundreds of dollars from their monthly mortgage bills and possibly help avoid foreclosure and free up household cash, helping spur economic growth.
Source: http://realtormag.realtor.org/daily-news/2011/10/24/obama-expected-unveil-housing-aid REALTORS.org article October 25,2011