President Obama Announces New Refinancing Plan to Help Struggling Homeowners

President Obama unveiled on Monday new rules to make it easier for homeowners to refinance their mortgages at today’s low-interest rates, no matter how far their property values have tumbled. The new changes to the Home Affordable Refinance Program (HARP) would apply to loans owned or guaranteed by Fannie Mae and Freddie Mac and to qualify, homeowners must be making on-time payments on their current mortgages.

The president announced the plan in Las Vegas, Nevada, one of the states hit hardest by the foreclosure crisis and where the unemployment rate is 13.4 percent, the highest in the nation. Federal officials hope that reducing monthly payments would free up cash for consumers to spend elsewhere, giving not a boost not only to the housing market, but to the overall economy as well.

In Kansas, NeighborWorks America’s Midwest regional director John Santner welcomed the potential boost for homeowners and housing. “Anything we can do to help solve the housing crisis would be a good thing,” he told the Kansas City Star.

HARP was originally unveiled in 2009, but it has fallen far short of expectations. It was designed to help up to 5 million people, but so far has reached only about 822,000. This new version would eliminate the previous limits which allowed only borrowers whose mortgages were no greater than 125 percent of the value of their homes to qualify. And it would remove certain fees and relieve banks of certain risks as part of the changes.

The program is not expected to increase costs to taxpayers. The Federal Housing Finance Agency is expected to publish final details in mid-November and borrowers can begin to enroll during the first quarter of next year.

Housing Partnership Network and Citi Foundation Launch Fund to Advance Innovations in Neighborhood Stabilization

Citi Foundation announced recently that it is committing $2.75 million to the Housing Partnership Network (HPN) to support the neighborhood stabilization efforts of community-based housing organizations in 10 metropolitan areas across the country. The Innovations in Neighborhood Stabilization and Foreclosure Prevention Initiative will provide the community based organizations with grants and other resources to support high-impact neighborhood revitalization projects over a two-year period. HPN has been a partner with NeighborWorks America and five other national organizations in neighborhood stabilization efforts through the National Community Stabilization Trust. HPN also collaborates with NeighborWorks America on the StrengthMatters Initiative.

Four NeighborWorks organizations will be a part of the Citi Foundation and HPN initiative:

Housing Development Fund will work to stabilize Connecticut cities with high rates of foreclosure by developing a cohort of “landlord entrepreneurs” who will play a significant role as owner-occupants in a new, coordinated financing and training model for the purchase, rehabilitation and responsible management of owner-occupied small multi-family properties.

HAP Housing will advance strategic neighborhood approaches for the stabilization of three low-income Springfield, Massachusetts neighborhoods hit hard first by the effects of foreclosures and abandonment, and then by a devastating F-3 tornado on June 1, 2011.

Neighborhood Housing Services of Chicago will implement a new model for advising homeowners through a network of Resolution Specialists who will work in partnership with the homeowner, lender, and servicer to modify mortgages through the new national Mortgage Resolution Fund effort.

Neighborhood Housing Services of New York City, Inc. (NHSNYC) in collaboration with the New York Mortgage Coalition (NYMC) and the Long Island Housing Partnership (LIDP) will create a foreclosure intervention program for existing homeowners who may qualify to own or rent their homes if prices were reset to current market valuations.