The Wall Street Journal reported earlier this week on a new plan to help more underwater homeowners refinance to lower interest rates despite owning more on their home than the current market value. We get this from the article:
The plan under consideration would make refinancing available to some borrowers whose houses are worth less than their loans, so long as they are current on mortgage payments, according to people familiar with the matter. Such borrowers typically aren’t able to refinance because they lack equity in their homes. The plan would apply only to mortgages owned by the banks. It isn’t clear how many of those borrowers would qualify for help. Around 20% of all U.S. mortgages are owned by U.S.-chartered commercial banks; the majority are held by investors in mortgage-backed securities.
The concept is still very short on details and seems to only apply to a fairly narrow range of people. But at least it is a sign that regulators a serious about opening new programs up for underwater borrowers who currently are not able to take advantage of the HARP program or FHA streamline program. We’ll keep you posted as more news on this subject comes out.
In the meantime contact us in the sidebar to see which programs you might already qualify for. While rates are up slightly from the lows reached near the end of September they are still hovering near all time lows.