The Obama Administration is extending for another year its refinancing assistance for homeowners with little or no equity, a program which has fallen short of helping its targeted number of borrowers.
The program has refinanced 190,180 mortgages with loan-to-values (LTVs) between 80 percent and 125 percent. It has been plagued by lender delays in processing complex refinancing packages for homeowners with secondary mortgages. And some borrowers have failed to qualify, or cannot afford closing costs or related fees.
Home Affordable Refinance Program, or HARP, is administered through Fannie Mae and Freddie Mac, the government-sponsored mortgage finance companies. It was launched in April 2009 and was to expire on June 10.
HARP represented about 10 percent of total refinancing volume through the end of last year. In 2009, Fannie Mae and Freddie Mac purchased or guaranteed more than 4 million refinanced mortgages.
The Federal Housing Finance Agency (FHFA), which oversees Fannie and Fannie, said it has extended HARP until June 30, 2011 “to support and promote market stability, and to encourage lenders and other mortgage market participants to fully adopt the HARP program.”
The number of borrowers with underwater mortgages has dramatically increased since the housing market collapse. And there are fears that an increasing number of homeowners in negative equity will “walk away” from their properties, fueling the unabated foreclosure crisis.
In states hardest hit by foreclose filings, the percentage of underwater mortgages is as high as 50 percent.
In October 2009, HARP was expanded to include “underwater” mortgages of up to 125 percent in LTVs.
“Thousands of families have already received much-needed relief … extending HARP for another year will enable us to help even more families,” said Michael J. Williams, president and chief executive officer of Fannie Mae.
Homeowners can visit http://www.MakingHomeAffordable.gov for more information.