New rules will let investors refinance

New rules will let investors refinance

by Catherine Reagor - Jan. 20, 2012 03:24 PM
The Republic | azcentral.com

Fannie Mae and Freddie Mac are changing the rules in a way that could make metro Phoenix's many home investors very happy.

The new program that allows homeowners with mortgages held by those government-owned mortgage giants to refinance, no matter how underwater they are, now will include investors. When the expanded Home Affordable Refinance Program, or HARP, was announced in October, investors weren't going to be included.

But then federal officials realized that many people who don't live in a home they own are accidental investors. They can't sell because they owe much more on their mortgage than their house is currently worth. Some no longer can afford their mortgage, so they are renting out their house and living in a less-expensive rental. Other unintentional investors are people who had to move for jobs but couldn't sell their home and are now renting it out.

Most of metro Phoenix investors buying foreclosure homes are paying cash, so they don't need to refinance.

Housing-market advocates say the addition of investors with Fannie or Freddie loans to the new HARP is a good move by the government because it can help homeowners who are stuck and not professional investors.

Help for homeowners who owe more than 125 percent of what their house is worth will be available in March. Homeowners should call their lender or servicer now and see if they can get the application process going or even refinance under the expanded program now. Some banks are doing the risky refinancings and holding the loan until this spring, when they can hand it off to Fannie or Freddie through the new HARP.

President Barack Obama will be in metro Phoenix next week. He did unveil the federal housing plan, which includes the original HARP and loan-modification plan known as HAMP, when he spoke in Mesa in early 2009.

We'll see if he has something to say about the modified HARP plan, which could help tens of thousands of metro Phoenix residents.

Nearly half of the region's homeowners are underwater.

Homebuilding boost

New-home sales across the Phoenix area in 2011 hit their highest level at the end of the year, according to the "Phoenix Housing Market Letter."

In December, 855 new homes sold. That's nearly double the monthly rate in Phoenix for most of 2011. It could be that the supply of foreclosure and resale homes is at a seven-year low, or the nearly record low interest rates.

RL Brown and Greg Burger, publishers of the report, are presenting their 2012 forecast at a Web conference on Wednesday.

Recent new-home-sales numbers and the big drop in foreclosure homes for sale could mean a slight rebound in homebuilding across the region this year.

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