Home Affordable Refinance Program Extension–Further Underwater Assistance For Homeowners

Homeowners in need of underwater refinancing assistance have been able to access help through the Home Affordable Refinance Program, and a recent announcement from the Federal Housing Finance Agency stated that the program will be extended, which will hopefully give more underwater homeowners additional time to address negative equity issues in cases where more affordability is needed to prevent foreclosure. Negative equity has been a major issue for numerous homeowners across the nation as home prices have either previously plummeted or continue to decrease, which has left homeowners in a situation where they owe a substantial amount more on their mortgage than their property value is actually worth and has left many wondering if there are any solutions to their predicament.

State-specific mortgage assistance in areas which were particularly hard hit by property value decreases have been set in place through the Hardest Hit Fund as a way to offer homeowners in these particularly troubled areas the underwater mortgage assistance they need. Yet, programs like the Home Affordable Refinance initiative have helped numerous individuals in a situation where the affordability on their home may have been compromised due to a decrease in the value of their property, which has been the result of various factors like unemployment and foreclosures.

Many homes which have been sitting empty for the past months have created an excess of properties which are simply unable to be filled with the current low rate of new homebuyers looking to move into a home. Arguments for new buyers have usually been positive, as these low property values and affordable mortgage rates may have led some homeowners to find a great deal on an existing home, but there are still issues where homeowners in a current underwater situation need help preventing the loss of their homes through foreclosure or incentives for not walking away.

However, it’s hoped that with the extension of HARP, which was supposed to expire in June of 2011 and will now run until June 2012, more homeowners may be able to find refinancing options when negative equity has become problematic, as there are some programs which may help homeowners in this area that have been unable to get off the ground and fully impact the housing market. One example of these programs is the FHA short refinance initiative which will allow homeowners to receive a principal reduction and refinance into a new FHA home loan, but when it comes to finding affordability on underwater mortgages, these problems have continually created issues between servicers and homeowners.

Obviously, many homeowners have called for principal reductions while others are simply looking for a lower monthly mortgage payment obligation, but there are some servicers who have been resistant to offering principal reductions, and in some cases, there have been troubles related to finding more affordable monthly payments for homeowners when negative equity may be too severe. While many banks have also been hesitant to offer underwater refinancing plans on a wide scale, this has been traced back to the fact that many of these servicers feel underwater mortgage homeowners will eventually default or simply walk away, but programs like HARP are still deemed to be necessary as there are numerous individuals who would rather forgo the loss of their home and do not consider walking away an option, but drastically need refinancing help when it comes to getting a lower payment obligations on their current mortgage.