The Big Story Blog

What's the new help for underwater mortgages?

Posted at 9:35 AM on October 25, 2011 by Paul Tosto
Filed under: Housing and mortgages

The Obama administration is expanding efforts to help citizens who saw the value of their homes plummet during the recession and now owe more on their mortgages than their home is worth.

It's basically a widening of the federal Home Affordable Refinance Program. designed to help people refinance their mortgages to take advantage of historically low interest rates.

Calculated Risk, one of our favorite economy blogs, writes, "What this program does do is remove many of the stumbling blocks to refinancing Fannie and Freddie loans (eliminate reps and warrants, reduce or eliminate fees, automatic 2nd subordination, minimal qualifying).

"These were all deal killers for HARP, and hopefully these changes will smooth the refinance road."

Minnesota Housing Finance Agency Commissioner Mary Tingerthal told Morning Edition host Cathy Wurzer today the changes could help 100,000 Minnesotans.

Click on the play button below to hear the interview.

While the expanded federal approach could help many more people refinance, it's not for everyone.

Tingerthal says it only applies to people with mortgages owned by home loan giants Fannie Mae or Freddie Mac.

You also have to be up-to-date on your payments.

It's intended for the homeowner that's still employed and isn't really struggling financially "but can't take advantage of lower interest rates because the value of their home has fallen through no fault of their own," Tingerthal said.


About Paul Tosto

Paul Tosto

Paul Tosto writes the Big Story Blog for MPR News. He joined the newsroom in 2008 after more than 20 years reporting on education, politics and the economy for news wires and newspapers across the country.