By Alan Zibel
March 10, 2011 Fox News
WASHINGTON -(Dow Jones)- Homeowners whose property values have fallen dramatically in the housing bust will have another year to refinance their mortgages through a government program, a federal regulator said Friday.
The Federal Housing Finance Agency, which oversees mortgage titans Fannie Mae (FNMA: 0.40, -0.01, -3.02%) and Freddie Mac (FMCC: 0.40, -0.01, -2.89%) said the two companies will now offer refinanced loans under the Obama administration’s Home Affordable Refinance Program through mid-2012. The program had been scheduled to expire on June 30.
The program allows borrowers to refinance if they owe up to 25% more than their property’s current value on their mortgages. Though it got a slow start, nearly 812,000 homeowners have now used the program since it was launched in 2009.
It has assisted more homeowners than the administration’s much-criticized Home Affordable Modification Program, which has helped about 540,000 homeowners to date.
The announcement came as Republicans mount an effort to end the administration’s foreclosure-prevention efforts. House lawmakers have voted to end two Obama foreclosure programs, and plan a vote next week on ending the flagship HAMP program. They have not targeted the refinancing program, which draws no direct taxpayer aid, for elimination.
The housing regulator also said new fees imposed by Freddie Mac would no longer apply to refinanced loans made under the HARP program. Those fees charge many borrowers an additional 0.25% when taking out a mortgage.
Fannie and Freddie buy mortgages from banks and other lenders, repackage them for sale as securities and make investors whole when borrowers default. The two companies nearly collapsed as a result of the housing bust, and regulators put them into a federal conservatorship in September 2008.
The Treasury Department has committed unlimited aid to ensure that the firms meet their obligations. So far, taxpayers are on the hook for $134 billion.