Regulator unveils help for underwater homeowners

[Eugene]

Source: Reuters

Regulator unveils help for underwater homeowners

(Reuters) - A leading U.S. housing regulator on Monday announced changes to a government refinancing program that could help up to one million homeowners whose homes are worth less than their mortgage.

The Federal Housing Finance Agency, which oversees mortgage finance giants Fannie Mae and Freddie Mac, said it was easing the terms of the two-year-old Home Affordable Refinance Program, which helps borrowers who have been making mortgage payments on time but have not been able to refinance as home values have dropped.

To help underwater borrowers, or those whose loans are worth more than their homes, FHFA said it will scrap a cap that prohibits any homeowners whose mortgage exceeds 125 percent of the property's value from participating in HARP, which is targeted at loans backed by Fannie Mae and Freddie Mac.

The plan, targeted at borrowers who hold loans backed by Fannie Mae and Freddie Mac, is the latest government effort to deal with a problem at the center of the economy's weak recovery -- a crippled housing market.

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Read more: http://www.reuters.com/article/2011/10/24/us-usa-housing-idUSTRE79K6JY20111024