declines in home values, the Inland Empire has been hard hit by underwater mortgages. With home prices about 60% below what homes sold for in approximately the year 2005, many are looking the troubled housing market dead in the eye.
Revisions to the Home Affordable Refinance Program are aimed at helping more underwater borrowers qualify for refinancing. The revisions include:
1. allowing those who owe more than 125% of the value of their homes to refinance
2. appraisals will not always be required
3. eliminating fees for borrowers refinancing into shorter term mortgages
Programs Requirements include:
1. Borrowers may not have late payments in the last six months and no more than one late payment in the last year
2. Mortgages must be guaranteed by Fannie Mae or Freddie Mac or sold to the firms by May 31, 2009.
While this program may be able to offer some homeowners a life-line, the catastrophic collision of underwater housing, a shrinking economy and a significant unemployment rate. As of September 2011, the State of California Employment Development Department reported an unemployment rate of 12.9% in San Bernardino County and 14% in Riverside County. These numbers are well above the national average and are given to illustrate the types of economic barriers that are facing homeowners within the Inland Empire.
For the homeowners that this will help throughout the Country, this program may create a breather. However, each homeowner must also carefully evaluate whether the Home Affordable Refinance Program will create a long term plan that is workable for them or rather a temporary bandage that is likely to cause pain again in the near future.
