Many homeowners who would like to refinance their homes are stifled from doing so because of current requirements making it more difficult. Still, many are hopeful that the recent expansion of the Home Affordable Refinance Program will be able to help.
The New York Times reports that HARP hasn't held up to their promise to help up to five million homeowners who owe more than their home is worth. The paper reports that only 900,000 borrowers with loans owned by Fannie Mae and Freddie Mac have refinanced using the program. Government officials claim the main benefit of the expansion is to reduce the odds that homeowners will simply walk away from their mortgage payments.
The source reports that many economists remain worried that the low housing prices and number of underwater homeowners are preventing the economy from recovering.
New criteria, including the loan limit raise and the relaxing of rules that force banks to take back bad loans should help make buyers eligible for refinancing, according to the source. The Federal Housing Finance Agency recalculated expectations and hope to double the size of the program.