US moves to help more homeowners refinance loans

The Federal Housing Finance Agency (FHFA), together with state-controlled mortgage financers Fannie Mae and Freddie Mac, said they would reduce or eliminate certain fees that had been hindering refinancings.

They will also eliminate the existing 125 percent loan-to-home value ceiling on Fannie- and Freddie-backed mortgages, and streamline the refinancing program by waiving certain requirements that had posed challenges to participants under the original Home Affordable Refinance Program (HARP).

The program is aimed at preventing homeowners who owe more on their mortgages than their homes are actually worth -- leaving them "underwater" on their mortgages -- from defaulting on the loans and giving up the properties.

The phenomenon of such defaults since the housing crash that began in 2006 has exacerbated the fall in housing prices and stalled any recovery in the market.

That in turn has left Fannie and Freddie, which buy up the lion\'s share of mortgages issued in the country, as well as commercial banks, struggling to prevent the quality of their own loan assets from deteriorating.

"We know that there are many homeowners who are eligible to refinance under HARP and those are the borrowers we want to reach," FHFA acting director Edward DeMarco said in a statement.

"Our goal in pursuing these changes is to create refinancing opportunities for these borrowers, while reducing risk for Fannie Mae and Freddie Mac and bringing a measure of stability to housing markets."

The end date of the HARP program, which has had disappointing results to date, backing fewer than 900,000 mortgage refinancings since its launch in 2009, was extended to December 31, 2013.

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