The Federal Housing Finance Agency (FHFA) has extended the participation of Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) in Mortgage Modification Program by another year. The two housing agencies were supposed to stop taking modifications in mortgaged by the end of this year. However, the regulator has now extended the deadline through 2016.
HAMP & HARP
The new announcement will let Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac participate in both the Home Affordable Refinance Program (HARP) and Home Affordable Modification Program (HAMP). At the same time, FHFA’s Director Melvin Watt has commented that any extension beyond 2016 in both HAMP and HARP is less probable. It is noteworthy that both HAMP and HARP were rolled out at primary tools of the Obama administration to manage the foreclosure crisis. Under HAMP, a borrower is allowed to reduce his monthly payments by extending the loan term while HARP allows refinance facility to borrowers even if they own greater than their property value.
No further extension
Both Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie refinanced 10,673 loans under HARP in February alone, whereas the total refinanced loans since the start of the program has reached 3.3 million. Watt remarked that both HAMP and HARP have significantly helped a number of underwater borrowers by offering them a reduction in monthly payments, resulting in lowering down of foreclosures. However, he added that the two programs are extending benefits to fewer borrowers over the time.
Also, one cannot overlook the fact that the programs continue to expose both Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie and its taxpayers to risks. Hence, any further extension allowing the participation of housing companies in programs is a dim possibility. the stock of Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) closed 1.04% lower $2.86 during the last session of the previous week, and 4.66 million shares changed hands.
