The Broader Market

by Sarah Rosen Wartell and Jordan Eizenga

The changes to the Obama administration’s Home Affordable Refinance Program announced last week by Fannie Mae and Freddie Mac are welcome, but more can be done to expand access to the program and allow additional struggling homeowners to refinance their mortgage at today’s historically low interest rates.

In October the two taxpayer-backed mortgage finance giants, Fannie Mae and Freddie Mac, in conjunction with the Federal Housing Finance Agency, released broad guidelines for how to increase mortgage refinancings through the Home Affordable Refinancing Program, or HARP, for homeowners who are “underwater” on their mortgages, owing more than the value of their homes. HARP, launched in early 2009, did not have the effect it was expected to as too few borrowers refinanced through the program. The proposed changes unveiled in October were designed to overcome this lack of take-up by making the program more attractive to both borrowers and lenders.

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