In an attempt to help the struggling housing market, the Federal Housing Finance Agency announced Monday new rules that will allow “underwater” homeowners to refinance at lower rates. The new program will allow homeowners who owe more than their homes are worth to refinance, no matter how much is owed, as long as they are current on their payments. The FHFA predicts up to a million will take advantage of the program.
The program is available to mortgages with loans backed by Fannie Mae and Freddie Mac. Officials hope that the new measures will provide a much-needed lifeline to homeowners, protecting them from foreclosure and freeing up more cash for the economy.