Washington, DC – October 26, 2011 – (RealEstateRama) — Congressman John Tierney released the following statement in response to the Federal Housing Finance Agency (FHFA) decision to enact a series of changes to the Home Affordable Refinance Program (HARP) that will help more eligible borrowers refinance their home mortgage.
“While today’s announcement is helpful to some homeowners whose home values have been eclipsed by their mortgage balances, more remains to be done for other homeowners in danger of foreclosure – a way must be found to restructure some loans, refinance others as with this program, and provide principle relief where appropriate,” Congressman Tierney said.
“Many big banks argue against these necessary changes by citing a ‘moral hazard’ argument or capitalization concerns, but these objections can be effectively dealt with if done properly,” Tierney continued. “Further, those objecting to homeowner relief should have been as worried about ‘moral hazard’ when taxpayer money was used to help banks as they are now when regular citizens need help!”
HARP aids those who have been making on-time mortgage payments but have not been able to secure refinancing at a lower rate due to the dropping value of their home. The new rules will help even those borrowers who have little to no equity in their homes to switch to a lower rate.
According to news reports, lenders in Massachusetts and across the country are refusing to refinance mortgages for families whose property values have dropped. This trend is leaving families most in need unable to access historically low interest rates and at risk for foreclosure. In Massachusetts alone, more than 230,000 families now owe more than their houses are worth.
Today’s announcement follows numerous demands for action from Congressman Tierney and his colleagues. Earlier this month, Congressman Tierney met with Acting Director Edward DeMarco of the Federal Housing Finance Agency (FHFA) to urge him to immediately implement changes to allow more American families to refinance their mortgages.
