Industry NewsMortgage

Home Affordable refi program expanded

Loan-to-value ceiling raised from 105% to 125%

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Homeowners who are up to 125 percent underwater will be allowed to refinance under the Obama administration's Home Affordable Refinance Program if they are current on their payments and their loan is owned or guaranteed by Fannie Mae or Freddie Mac.The federal regulator overseeing Fannie and Freddie has boosted the program's loan-to-value (LTV) ceiling from 105 percent to 125 percent to allow more homeowners to take advantage of lower mortgage rates.Fannie and Freddie will also offer pricing incentives to encourage borrowers with LTVs above 105 percent to refinance into 20- or 25-year loans to pay down principal more quickly and reduce lifetime interest payments, the Federal Housing Finance Agency said.When the Home Affordable Refinance Program was announced in February, the Obama administration said it hoped that as many as 4 million homeowners will be able to refinance under the program.But some critics said the program wouldn't help borrowers whose loans aren't backed by Fannie and ...