81K FL Homeowners Missing Out on Mortgage Savings
Florida has the highest number of homeowners nationwide failing to cash in on a federal mortgage savings program that could save them hundreds of dollars each month.
An estimated 81,420 Florida borrowers are not taking advantage of the lower interest rates available through the Home Affordable Refinance Program (HARP), according to a year-end report from the Federal Housing Finance Agency (FHFA).
The program, which was developed for borrowers who can’t do a normal refinance because their loans are underwater, was scheduled to sunset at the end of the year. But hoping to reach more homeowners, including 3,877 in Palm Beach County, FHFA Director Melvin Watt announced earlier this month that the program would be extended through 2016.
Homeowners in South Florida, which includes Palm Beach, Broward and Miami-Dade counties, have saved an average of $216 per month, or $2,592 per year, in the refinance program.
“We want to encourage the 600,000-plus borrowers nationwide who would still benefit from the HARP program to take advantage of HARP while they still have the opportunity to do so and while interest rates remain low,” Watt said during a May 8 speech in Los Angeles announcing the extension.
California has the second highest number of potentially eligible homeowners failing to take advantage of the refinance program at 31,092.
In April, the interest rate on a 30-year fixed-rate mortgage was 3.67 percent, according to federal mortgage backer Freddie Mac. That’s down from 4.34 percent during the same month last year.
Because of Florida’s high number of non-participating borrowers, FHFA focused a public awareness campaign last week in the Orlando area, which has about 9,270 eligible borrowers who haven’t taken advantage of HARP. Despite the outreach, Florida housing counselors complain borrowers remain unaware of the program and are often surprised to learn they can use it to lower their interest rates.
“It’s definitely a lack of understanding and a lack of knowledge,” said Kenesha Wood, director of counseling at the West Palm Beach-based Real Estate Education and Community Housing, Inc. “Even people in the industry don’t understand it.”
HARP is for homeowners current on their mortgage payments, but who can’t refinance into a lower interest rate mortgage because they owe more on their loan than their home’s value. It is only for mortgages backed by Fannie Mae and Freddie Mac that were originated or sold to Fannie or Freddie before May 31, 2009.
Source: “81K Fla. homeowners missing out on mortgage savings,” Florida Realtors