WASHINGTON The Obama Administration's signature refinancing and loan modification programs will be extended for an additional year, Federal Housing Finance Agency Director Mel Watt said Friday.
Both the Home Affordable Refinancing Program and the Home Affordable Modification Program were slated to expire at yearend 2015, but Watt said in a speech in Los Angeles that the mortgage giants Fannie Mae and Freddie Mac will continue to participate in the programs until the end of 2016.
"Extending HAMP and HARP through the end of 2016 will provide relief for borrowers who continue to face challenges either paying their mortgage or refinancing their loan," Watt said to the Greenlining Institute Annual Economic Summit.
While Watt acknowledged that participation in the two programs has declined, he said there are still borrowers in good position to benefit from mortgage relief. He noted, for example, that 600,000 borrowers could still benefit from a HARP refinancing to reduce their monthly payments. Overall, HARP has helped 3.3 million borrowers refinance their Fannie- or Freddie-guaranteed loans.
The FHFA director stressed, however, that the extensions of the two mortgage relief programs will be their last. Both programs were initially rolled out in 2009.
"Although the number of new borrowers entering these two programs continues to decline, in part because many eligible borrowers have already taken advantage of them and in part because of recovering house prices, lenders and servicers are continuing to approve new HAMP modifications and HARP refinances," he said.
In his remarks, Watt also discussed efforts to improve diversity both at the FHFA and the government-sponsored enterprises.
In November, the FHFA hired Sharron Levine to be the director of the agency's Office of Minority and Women Inclusion, and Watt said the agency's most recent "scorecard" it uses to grade performance at Fannie and Freddie included a "commitment to diversity and inclusion as one of the overarching criteria we will use to assess" the two mortgage giants.
The GSEs are now "making efforts to get minority-, women and disabled-owned businesses and nonprofit organizations involved in their nonperforming loan sales," Watt said.
Meanwhile, the Federal Home Loan banks are subject to a new FHFA rule to promote diversity.
"This rule puts in place new reporting requirements for the Federal Home Loan Banks about the makeup of their board of directors," Watt said.