Better Alternative Than Foreclosure
Its calls for the refinancing limit on how far underwater a mortgage may be eligible for the program be increased or completely eliminated. Currently, the program has a cap of a 125 percent loan-to-value ratio – that is, the mortgage balance can not exceed 25 percent above the value of the property for borrowers to qualify.
Of course, refinancing options through HARP can provide homeowners with a mortgage or owned by Fannie Mae and Freddie Mac to possibly more affordable, there are calls for servicers to offer principal forgiveness in cases where a negative equity is a problem, but many think that simply lowering a homeowner client does little to help with the affordability and have opted for home loan modifications instead. If the government looks at the different options when it comes to reforming the housing finance market, it seems likely the costs will increase.
Both parties are looking for a more stable market that are less sensitive to increased foreclosure crisis and credit creation. While the current owners may have had the option through the FHA short refinance program to a percentage of their principal amount forgiven mortgage, while also offering one of the major forgiveness opportunity the plan never really got off the ground as providers are not willing were able to homeowners on their existing housing loan payments.