President Obama has announced a new series of reforms to make refinancing mortgages easier for families that are currently facing foreclosure. The President has contrasted his efforts to reform the Home Affordable Refinance Program, briefly known as HARP, with inaction in Congress on housing-related matters.
Under the President’s reformed program, families would have more time to refinance their mortgages and more people would be eligible for lower interest rates on refinanced loans that are backed by two large financial institutions.
The President announced these proposed changes in Las Vegas, one of the hardest hit cities of the current housing crisis. Housing prices in Las Vegas have dropped by about 50% since 2008. Under the changes to HARP homeowners would still not qualify for the program if they owe more than 125% of their home’s current value on their mortgage. However, even with this limitation, the Obama administration hopes that one million more families will be added to government mortgage programs like HARP thanks to these changes.