President Obama has announced plans to help homeowners who are underwater and struggling to make their mortgage payment each month. The announcement came on an October campaign visit to Las Vegas.
The plan applies to the 2 year old Home Affordable Refinance Program (HARP). The housing initiative would allow homeowners who are still current on their mortgage to refinance if they are 25 percent or more underwater in their homes. There is no limit on how underwater the homeowner can be. This would apply to federally guaranteed loans (Fannie Mae and Freddie Mac) created before June 2009. It would also allow homeowners to refinance with companies other than their lender so that they can shop for the best interest rate. Closing costs would be lower as well.
The changes will only help a small fraction of homeowners. It will not help the many who are already behind on payments or those who do not have federally backed loans. In addition, while the interest rate would go down to current rates for those who qualify, homeowners would still remain underwater in their homes.
The HARP program originally went through June 2012, but the administration is now extending it through the end of 2013.
While in Las Vegas, the President also announced a $15 billion dollar neighborhood revitalization plan. It’s a plan that’s in his current jobs revitalization proposal. The plan would help redevelop abandoned and foreclosed properties. The President’s hope is that it would help to stabilize neighborhoods.
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