By: Favian ClaiSome much needed relief may be coming to homeowners who were not once eligible under the Government's "Making Home Affordable" program.
On July 1st,
HUD Secretary Shaun Donovan announced an official expansion of the Obama Administration's Home Affordable Refinance Program to now include participation by homeowners who are current with payments, but are up to 125% underwater on their mortgage.
The
Home Affordable Refinance Program was a program designed by the Obama Administration to reduce the amount of foreclosures across the nation on those who may be able to afford their home with some help.
The program seeks to provide one of two solutions for homeowners:
- Refinancing
For those who can't take advantage of lower interest rates due to their property value.
- Modification
For those who are struggling to make payments due to less income or higher interest rates.
Since the beginning of the program on February 18th, more than 200,000 homeowners have received offers for trial loan modifications with about 80,000 refinances under way and more than one million borrowers who may be eligible have been notified about the Government program.
The assistance for homeowners does not stop there however. HUD plans on deploying the HUD Foreclosure Rapid Response Team to assess the areas hit the hardest by foreclosures, starting with Las Vegas.
The teams will consist of two senior-level HUD Field staffers with experience in single family housing and community outreach. Their task will be to determine the needs in the city targeted by the team, along with their surrounding areas based on delinquency rate data at the zip code level, along with listening sessions from counseling agencies, lenders, and members of the public.
Analysts estimate that the new program's expansion benefits about 10% of borrowers that have loans back by Fannie Mae or Freddie Mac. However they believe that an additional 4% of borrowers with Fannie Mar or Freddie Mac are further underwater.
Since the foreclosure waves have begun, there has been a rapid decline of values in homes across the country. So much that it is estimated that 20.4 out of about 93 million homes, condos and co-ops now have
mortgages that are higher than the properties are worth.
There's still no relief in sight for those who may be even further underwater than 125% of their value however homeowners who are in trouble can still apply for loan modifications from their lenders directly, or utilize programs offered by their Private Mortgage Insurance company.
