WASHINGTON (AP) — The federal government is looking at how it could help a greater number of homeowners who owe more than their house is worth refinance at today’s historically low rates.
The Federal Housing Finance Agency said Friday that it would review a program launched two years ago to see if it could be expanded so more homeowners could qualify,. The announcement was made in a statement released a day after President Barack Obama mentioned the idea in a speech to Congress,
The Home Affordable Refinance Program, or HARP, allows people whose homes are underwater by as much as 20 percent to refinance their mortgages at lower interest rates. Banks typically require that homeowners have some equity before approving a refinance loan.
The program gives homeowners a chance to reduce their mortgage payments by hundreds of dollars per month. But many people are not eligible for the program because their home values have fallen much further.
Edward J. DeMarco, the housing agency’s acting director, said officials are “carefully reviewing the mechanics” of the program to “identify possible enhancements that would reduce barriers for borrowers already otherwise eligible to refinance using HARP.”
The program only covers mortgages created before June 2009 and owned or backed by government-controlled mortgage buyers Fannie Mae and Freddie Mac. Borrowers must also be current on their payments.
This week, the average rate on a 30-year fixed mortgage fell to 4.12 percent. That’s the lowest level in six decades.
As of July, more than 838,000 homeowners had refinanced through the program. Officials had hoped at least 4 million Americans would take advantage.