(Reuters) – U.S. homeowners who owe more than their properties are worth got new help on Monday with the government’s expansion of a refinancing program in a step that could help up to 1 million borrowers.
The regulator of mortgage finance giants Fannie Mae and Freddie Mac eased the terms of a program that helps so-called underwater borrowers who have made payments on time but have been unable to refinance.
“These are important steps that will help more homeowners refinance at lower rates, save consumers money and help get folks spending again,” President Barack Obama told a crowd in Las Vegas, a city hard hit by the foreclosure crisis.
The overhaul, which would only help a fraction of the nation’s 11 million underwater borrowers, is the latest government effort to breathe life into the crippled housing market.
Officials have been frustrated that numerous attempts to bolster the sector and help borrowers have had little success.
The Federal Housing Finance Agency said it was scrapping a cap that prohibited borrowers whose mortgages exceeded 125 percent of their property’s value from refinancing loans backed by Fannie Mae and Freddie Mac under the government’s Home Affordable Refinance Program (HARP).
It also took steps to coax homeowners into shorter-term loans and encourage more banks to participate in the program.
via U.S. throws lifeline to underwater homeowners | Reuters.
