Lifelines for Those ‘Underwater’
AS property values in the New York area slide, more borrowers are finding themselves “underwater,” which means they owe more than their homes are worth.
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Now the government is throwing a lifeline to such homeowners, along with similar borrowers nationwide.
This month, the Federal Housing Finance Agency unveiled a new version of its Home Affordable Refinance Program, whereby lenders can offer new mortgages to borrowers even if their home’s value exceeds the mortgage amount by as much as 25 percent — as long as the borrower hasn’t missed loan payments in the past year.
Under the initial plan announced in February, lenders could refinance a loan only if the borrower’s mortgage was no more than 5 percent greater than the home’s value. With property values in many areas down sharply from their peak levels, 5 percent wasn’t enough to help many borrowers.