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On the heels of President Obama’s vow to take executive action to allow more Americans to refinance their homes, reports suggest that Federal Housing Finance Agency (FHFA) officials met with mortgage industry executives last week to discuss possible changes to the Home Affordable Refinance Program (HARP).

HARP’s primary purpose is to help the “underwater borrowers” take advantage of record-low interest rates to reduce their monthly payments and prevent foreclosure.

Acting director of the FHFA, Edward DeMarco, stated he is working with the government to reduce “frictions” in the current program for borrowers who owe more than their home’s value.

The “frictions” he intends to modify in the current HARP, which is set to expire at the end of June 2012, includes raising the loan-to-value ratio (currently 125 percent) to expand the pool of eligible borrowers.

DeMarco’s goal of increasing the pool of eligible borrowers, echoes President Obama’s intentions to provide homeowners a way to take advantage of record-low interest rates, raise consumer spending, and strengthen the housing market.

However, banks are apprehensive because of their belief that these types of loans are more likely to default. Reports indicate one of the options in the modification of the current program may include giving banks protection against defaults such as charging elevated premiums for their guarantees.

News and reports about expanding and extending HARP and how it may affect you can be found on ZING! as information becomes available.

Jonathan Slappey writes for Quicken Loans, ranked “Highest in Customer Satisfaction for Primary Mortgage Origination” by J.D. Power and Associates.  Check out what some of our amazed customers have to say at Epinions.

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