Underwater homeowners with Fannie Mae- and Freddie Mac-backed mortgages will be able to try to refinance their mortgages for another two years.
The Federal Housing Finance Agency announced Thursday that Fannie and Freddie’s Home Affordable Refinance Program, which was set to expire Dec. 31, will be extended until the end of 2015.
“More than 2 million homeowners have refinanced through HARP, proving it a useful tool for reducing risk,” said FHFA acting director Edward DeMarco, in a statement.
According to the most recent data, in January alone, one in five refinancings of Fannie and Freddie-backed loans occurred under HARP. Of the loans refinanced under the program that month, 25 percent had a loan-to-value ratio of greater than 125 percent.
Eligibility for the program, announced in early 2009, remain the same. The mortgage must be owned or guaranteed by Fannie or Freddie on or before May 31, 2009, and the current loan-to-value ratio must be greater than 80 percent.
In addition, borrowers must be current on their mortgage payments, with no late payments in the past six months and they cannot have made more than one late payment in the past 12 months.
To apply for the program, borrowers should contact their existing lender or another lender participating in the program. Consumers do not need to use outside companies that bill themselves as “mortgage experts” or “foreclosure specialists,” the agency said.