If you are a homeowner with an upside-down mortgage and have still yet to refinance your home, there is good news. President Obama is extending the highly successful Home Affordable Refinance Program (HARP) through 2015. The program enables underwater homeowners with loans exceeding the current value for their homes to refinance their mortgages despite negative equity. This extension means that homeowners can rest assured for another year, providing ample time to refinance with the current low interest rates.
The decision, made by the Federal Housing Finance Agency (FHFA), announced in early April, was set in place to target underwater homeowners that had yet to benefit from some of the lowest interest rates in recent history. The FHFA intends to bolster support and utilization of the extension of HARP through strategic campaigning throughout the country to encourage homeowners to explore their options within the program’s guidelines.
As reported by national statistics, HARP has already helped more than 2.2 million homeowners to refinance their mortgages since its inception in 2009. According to the Los Angeles Times there are still about “2.7 million underwater homeowners remain eligible for HARP loans, according to online lender Quicken Loans, which said the average savings from a HARP refinance is around $200 a month with an average rate reduction of 1.75 percentage points.” This is a promising figure, as the extension of HARP through 2015 will enable homeowners more time to refinance thereby reducing financial risk for Fannie Mae and Freddie Mac, the governmental finance corporations holding nearly two-thirds of all residential mortgage debt in the U.S. It is the hope of the Federal Government and The Obama Administration that HARP will continue to be a useful tool for government and homeowners in the fight to stabilize the housing market. With the success of the program, it is likely that the extension through 2015 and any subsequent extensions or additions to the program will be met with strong bi-partisan and Federal Reserve support.