The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, announced it was adjusting the current Home Affordable Refinance Program. The program was developed to help borrowers who have been making timely payments on heir mortgage, but unable to qualify for a refinance as the housing market changed and values lowered.
Underwater borrowers generally owe more than what their home is currently worth. Currently, the program is assisting those whose loan does not exceed 125% of their home value, but for many whose home has lost significant value, they have been unable to obtain assistance in the past.
To help more people, the Administration is removing the cap, to allow homeowners who owe more than 125% of their current home’s value to be eligible. To encourage banks to participate in the program, FHFA is revamping it to protect lenders from having to buy back HARP loans if underwriting problems are later found.
Banks will only have to verify that borrowers have made at least six of their last mortgage payments and the new rules eliminate the need for appraisals in most cases.
Changes are expected to come in before the end of the year, and many, are concerned as to how many homeowners they will be able to help.
Sherwin is a REALTOR® in the Chicago & Suburban area with @properties. Originally posted at https://realtyevolved.net.
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