Released: July 02, 2009

Mortgage refinance program expands

Source: Renae Merle, Washington Post (Free Registration)

The Obama administration announced yesterday that it would loosen the eligibility requirements for a program aimed at helping borrowers with no equity in their homes to refinance into cheaper mortgages.

Acknowledging that falling housing prices have made it increasingly difficult for borrowers to qualify, officials said the program would now be open to those whose mortgage debt is up to 125 percent of their home value. The program, launched in February, was initially open only to those borrowers who owed no more than 105 percent of their home value.

The program targets the growing number of borrowers—one in five according to recent research—who owe more than their home is worth, a situation known as “being underwater.” These homeowners are considered at a higher risk of foreclosure and have been targeted by the Obama administration under its Making Home Affordable program.

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