With mortgage interest rates continuing to hover near record lows, the Federal Housing Finance Agency has announced big changes to the Home Affordable Refinance Program with the intention of making it easier for homeowners to save money by refinancing their loans at these rock-bottom rates.
For loans backed or owned by Freddie Mac or Fannie Mae, the new rules will reduce or eliminate some fees associated with refinancing. Also, homeowners owing more than 125% of the value of their homes will no longer be barred from refinancing.
But there is fine print. From the L.A. Times:
Even with the new rules, only borrowers with mortgages taken on by Fannie and Freddie on or before May 31, 2009, can qualify. Their loan amounts must top 80% of the current market value of their homes. And they must be current on their payments, with no late payment in the last six months and no more than one late payment in the last 12 months.
That means the program provides no help for the 3.5 million or so homeowners who are seriously delinquent on their loans or in default.
The Times reports that the administration is working on a program to convert empty homes into rental properties.