The federal agency that oversees taxpayer-backed mortgage giants Fannie Mae and Freddie Mac said Friday it is working with the White House to explore ways to help troubled homeowners take advantage of historically low interest rates.
The announcement by Edward DeMarco, acting director of the Federal Housing Finance Agency, came a day after President Obama referenced the effort in an address to Congress, saying his administration would “work with federal housing agencies to help more people refinance their mortgages at interest rates that are now near 4 percent.”
DeMarco said in a statement Friday that his agency would further reevaluate an existing initiative in order to “determine if there are ways to extend the benefits of this refinance product to more borrowers.”
The Home Affordable Refinance Program, or HARP, currently covers mortgages that were originated prior to June 2009 and backed by Fannie and Freddie. To be eligible, borrowers must be current on their mortgage payments, and their loan must not exceed 125 percent of the value of the home.
As of the end of June, 838,000 borrowers had refinanced through the HARP program. The FHFA said Friday that was “a meaningful number” but acknowledged it amounted to “fewer than expected or eligible for the program.”
The bleak housing market has continued to weigh down the struggling economy. Many efforts by the administration to revive the market and aid struggling homeowners have fallen short, as persistent unemployment has deepened the foreclosure crisis and many homeowners have been unable to qualify either for government programs or refinanced loans from lenders.
Recently, the White House has been pushing for an effort that would help borrowers lock in low rates and make their payments more affordable. But the FHFA, an independent agency charged with protecting the interests of Fannie and Freddie under its role as conservator, has been skeptical about offering new mortgages to borrowers who owe more than their homes are worth.
The program has previously been modified, but DeMarco said in his statement Friday that the FHFA “is carefully reviewing the mechanics of HARP” to find ways that might “reduce barriers.”
“If there are frictions associated with the origination of HARP loans that can be eased while still achieving the program’s intent of assisting borrowers and reducing credit risk for [Fannie and Freddie], we will seek to do so,” he said.
Meanwhile, the White House is exploring a range of options to help the battered housing market, and recently announced a measure that seeks to reduce payments for unemployed homeowners.