Help coming in March for underwater Phoenix-area homeowners

A long-awaited federal program will soon allow more Phoenix-area homeowners to refinance their mortgages and lower their payments in spite of owing far more than their homes are now worth. The expansion of the Home Affordable Refinancing Plan will allow for new home loans in March, according to new details from the U.S. Department of Housing and Urban Development, and homeowners are already lining up to apply. President Barack Obama announced the plan in October, and borrowers have awaited the details since. The program targets homeowners who bought during the housing boom and have been unable to refinance up until now because their homes are no longer worth enough to secure a new mortgage through traditional refinancing. An earlier version of HARP allowed homeowners with mortgages backed by two federal loan agencies to refinance, but only if their new loans were no more than 125 percent of their home's current value. In metro Phoenix, where values have plunged by more than half since the market's peak in 2006, that limit left many borrowers out. The update to the program, which lenders refer to as HARP 2.0, lifts that loan-to-value restriction completely. The goal is to help homeowners save money and fend off foreclosures by lowering payments. For a typical $250,000 mortgage, a switch from a 6 percent rate to current rates of about 4 percent would cut the monthly payment by about $300.

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