Federal Life-Preserver Loans Target Sinking Borrowers


This weekend the Times had word about a new version of the federal Home Affordable Refinance Program, which is expected to start issuing loans by October and is aimed at helping borrowers who owe more than their homes are worth. So-called "underwater" borrowers who have not missed a mortgage payment—but are nevertheless in danger of becoming the next wave of foreclosures—will be able to avail themselves of the program if their mortgage is up to 25 percent more than their home's current value. The loans will only be given to borrowers who have Fannie or Freddie loans, and they probably won't have the very most competitive rates. Nevertheless, they're expected to help out a lot of New York-region borrowers: "Michael Moskowitz, the president of Equity Now, a lender based in Manhattan, says he believes that New York borrowers will benefit from the recent changes. The area, he said, is among the last in the nation to experience significant drops in real estate values. 'But because of the unemployment on Wall Street, that will continue,' Mr. Moskowitz said. 'So this program will have a very meaningful effect here.'"
Lifelines for Those ‘Underwater’ [NY Times]
Photo by zert.sonstige_2008

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