President Obama has recently shown how distressed homeowners have been taking advantage of the administration’s refinance programs but that more needs to be done. He has announced figures that demonstrate how, in many troubled housing markets, struggling homeowners are successfully pursuing government-backed refinance programs.
By allowing homeowners financial relief from the burden of underwater property whose market values have fallen, the health of the overall economy is improved. Secretary of Housing and Urban Development Shaun Donovan pointed out that applications to the Home Affordable Refinance Program have doubled in Arizona, Nevada and Florida, the hardest-hit states.
Over one million homeowners have been helped under HARP, in effect since 2009. HARP allows distressed homeowners who are not behind more than six months in their mortgages to refinance at lower mortgages rates. These homeowners are deemed responsible and deserving of government help. Additional aide removing more barriers has been furnished by a program released in October 2011.
The administration has pointed out that their efforts have been limited to mortgages underwritten by Fannie Mae and Freddie Mac, the quasi-government agencies that underwrite and back up a large percentage of the country’s mortgages. The administration says, however, that Congress needs to extend help to more Americans whose properties are not covered by Fannie Mae and Freddie Mac.
On Friday, Obama used a presidential visit to illustrate how Val and Paul Keller, a couple owning a house in the heavily distressed area of Reno, Nev., were able to save $240 a month on their underwater property through the government refinance program. Although they owed $168,000 on the house, market forces had reduced its present value to $100,000. Obama explained that helping the Kellers to regain equity in their property helped to improve Nevada’s economy and stabilize the country’s housing market.
Read more at the Washington Post.