In recent years, many individuals have faced problems with mortgage debt. One thing that some homeowners are currently facing is being underwater on a mortgage. A person is underwater on a mortgage when the amount they owe on the mortgage is greater than the value of the property the mortgage is on.
Recently, President Obama announced a new initiative that reportedly is aimed, in part, at giving certain underwater homeowners a chance to refinance their mortgages.
According to the Washington Post article which reported this story, the new initiative will revise a current refinancing program, the Home Affordable Refinance Program (HARP). HARP reportedly is aimed at giving homeowners who meet certain requirements the chance to refinance their mortgages.
In its initial form, one of the requirements to be eligible for HARP was that the amount a person owed on the mortgage they held could not be greater than 125 percent of the value of the property the mortgage was on. According to the Washington Post article mentioned above, one of the revisions the new initiative will make to HARP is that it will eliminate this eligibility requirement, thus opening the program up to individuals who owe more than 125 percent of the value of their home on their mortgage.
Thus, it appears that the new initiative is aimed, in part, at trying to provide help to certain underwater homeowners. It will be interesting to see how many underwater homeowners ultimately participate in the revised HARP and whether the revised HARP is effective in providing financial relief to such homeowners.
Source: The Washington Post, “Government announces new program to help ‘underwater’ homeowners,” Zachary A. Goldfarb and Scott Wilson, Oct. 24, 2011