The Obama administration announced plans Monday to assist struggling homeowners, providing hope for those who havent been able to refinance because their home values are underwater. The restructuring could curb foreclosures, especially in hard-hit markets like Las Vegas, where Obama delivered his housing proposal.
The movement has drawn praise from many business leaders, including RE/MAX Chairman and Co-Founder Dave Liniger. Liniger has been influential in government policymaking and has been an outspoken proponent of housing initiatives and reform in Washington, D.C. He applauds the administrations move to expand the Home Affordable Refinance Program (HARP) through executive means, calling it "the right action at the right time."
To find out more about the restructuring of HARP, download the HARP Fact Sheet.
"The problems in the housing market have to be addressed to further economic recovery, and it means taking aggressive action. We cant wait," said Liniger, who has met with government and industry officials throughout the year. "This type of reform is crucial in getting help for diligent borrowers, giving homeowners who have a chance to reduce their payments and save their homes the means to do so. We cant afford a higher inventory of homes on the market right now. Something needs to be done and this will certainly help."
The new program benefits borrowers who are making on-time payments on their current loans regardless of how much their home value has dropped. Previously the program was available only to borrowers whose mortgages were no greater than 125 percent of the value of their homes. The loans must be owned or guaranteed by Fannie Mae or Freddie Mac.
"These are important steps that will help more homeowners refinance at lower rates, save consumers money and help get folks spending again," Obama said in his speech. The administration hopes the move will curb foreclosures, thereby also helping home values slowly recover.
According to RealtyTrac, September marked the 12th straight month where foreclosure activity decreased on a year-over-year basis. But Octobers report showed one in every 213 U.S. households with a foreclosure filing in the third quarter of 2011.