Federal officials recently announced an extension to the refinance program aimed at helping homeowners who owe more on their mortgages than their homes are worth.
The Home Affordable Refinance Program was set to expire June 30 but has been extended another year, said the Federal Housing Finance Agency. The program covers Freddie Mac and Fannie Mae loans, and since its inception two years ago, about 622,000 mortgages have been refinanced, according to the agency's latest quarterly report.
The Mortgage Bankers Association had lobbied the agency for the extension, saying the housing market is still in a shaky state.
Under the program, lenders, investors and loan servicers get financial incentives to help borrowers who are current on their payments but whose mortgages are up to 125 percent of the property value.
President Barack Obama unveiled the program as part of the Making Home Affordable rescue plan in March 2009.
Back then, rates were trending down, and homeowners struggling to pay their mortgages could not take advantage of lower rates because of the credit crunch. People with no equity in their homes found it practically impossible to refinance. Lenders considered such loans risky because properties were losing value with no end in sight.
A FORECLOSURE SPIKE
The Island's 818 foreclosure-related filings last month accounted for a 23 percent jump from a year earlier, while the nation saw its biggest year-over-year decrease since RealtyTrac began reporting numbers in 2005.
That's because February 2010 had unusually low numbers here -- 666 foreclosure-related filings, which are new cases, auction notices and lender repossessions. Last winter and spring, the norm was closer to 1,200 to 1,300 cases, RealtyTrac data show.
RealtyTrac and other experts have warned against taking one month's change too seriously.
RealtyTrac chief executive James J. Saccacio attributed the nationwide low to recent scandals over lenders' foreclosure practices that prompted attorneys general in all 50 states to join together to investigate the practices. Their recommendations and report are due soon.
"While a small part of February's decrease can be attributed to it being a short month and bad weather, the bottom line is that the industry is in the midst of a major overhaul that has severely restricted its capacity to process foreclosures," Saccacio said. "We expect to see the numbers bounce back, but that will likely take several months."