Last month, the New York Times highlighted Madonna Barwick, a teacher in Canfield, Ohio, whose mortgage rate dropped 4 percent due to a HARP refinance. “It was a blessing,” she said.
The HARP loan program is the go-to tool for homeowners who are either underwater or have low equity. Since the housing crisis, 3.4 million Americans have taken advantage of the program. In January of 2015, the New York Times reported that 700,000 homeowners could still benefit from a HARP refinance. Today, only 323,000 remain.
While this is a sure sign that homeowners are utilizing HARP, the number was still large enough that the government has extended HARP to September of 2017 (it was scheduled to expire at the end of 2016).
This move will allow more people to refinance their mortgages, and get a reduction in their mortgage payments. Twelve percent of homes fell into this category at the end of June, Erin Lantz, vice president for mortgages with the real estate site Zillow, told The New York Times.
"An estimated 300,000 people are still eligible for the program."
While 3.4 million homeowners have taken advantage of this initiative since it began in 2009, the fact that an estimated 300,000 people are still eligible for the program shows there are still levels of weariness in the public. Experts say this is because many people either aren't aware of the program, believe they are ineligible or think there's some sort of catch for applying. In addition to HARP's extension, the Federal Housing Finance Agency announced another program aimed at assisting struggling homeowners.
Lenders Fannie Mae and Freddie Mac, which are overseen by the federal government, will offer a refinancing option for homeowners with a high loan-to-value ratio - meaning they owe more than on their home than it's valued for - by offering them cash to make mortgage payments
, Miami Agent magazine reported. To be eligible for the program, individuals must not have missed a mortgage payment in the past six months, not missed more than one payment in the past year, have a source of income and the refinance must have a benefit for them. Furthermore, homeowners with existing HARP loans are not eligible for this method of refinancing. This option will become available to consumers in October 2017, according to Miami Agent magazine.