Florida, with its struggling economy and backlog of foreclosures, could be a main beneficiary of a revamped mortgage refinancing program announced Monday.
The new Home Affordable Refinance Program is designed to make it easier for borrowers with underwater mortgages to take advantage of today’s historically low interest rates.
The desired outcome: Lower monthly mortgage payments means more people can stay in their homes — and out of foreclosure. It also means more money in people’s pockets to pump into the economy.
Earlier, more restrictive rules prevented many homeowners, especially those who bought during the height of the real estate boom, from benefiting. The revamped program has fewer restrictions.
University of Central Florida economist Sean Snaith said the announcement is the “first sensible housing policy” he has heard in some time and could give the sagging economy a boost.
As of the end of June, more than 314,000 Tampa Bay area homeowners owed more than their homes were worth, according to mortgage research firm CoreLogic. Forty-five percent, or 1.9 million, of all mortgages in the Sunshine State are underwater — the third highest in the country.
“This is a step in the right direction,” Snaith said. “It holds some promise. This will free up disposable income.”
Here are some questions and answers about the Obama administration’s initiative:
What is the program?
The Home Affordable Refinance Program, or HARP, was started in 2009. It lets homeowners refinance their mortgages at lower rates. Borrowers can bypass the usual requirement of having at least 20 percent equ…read more
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