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The United States Housing and Economic Recovery Act of 2008 (commonly referred to as HERA) was designed primarily to address the subprime mortgage crisis.It authorized the Federal Housing Administration to guarantee up to $300 billion in new 30-year fixed rate mortgages for subprime borrowers if lenders wrote down principal loan balances to 90 percent of current appraisal value.
The Home Affordable Refinance Program (HARP) was created by the Federal Housing Finance Agency in March 2009 to allow those with a loan-to-value ratio exceeding 80% to refinance without also paying for mortgage insurance. Originally, only those with an LTV of 105% could qualify.
Research indicates only 6% of high-cost loans—a proxy for subprime loans—had any connection to the law. Loans made by CRA-regulated lenders in the neighborhoods in which they were required to lend were half as likely to default as similar loans made in the same neighborhoods by independent mortgage originators not subject to the law." [1]
Hold a government-back mortgage: In addition to FHA-backed loans, mortgages backed by the U.S. Department of Agriculture’s (USDA) or the Department of Veterans Affairs (VA) also qualify.
However, government-backed loans like FHA, VA, and USDA may have different requirements. FHA streamline refinances and VA loans might not require an appraisal, allowing refinancing with little or ...
FHA loans: Insured through the Federal Housing Administration, FHA loans have more lenient credit score and DTI ratio requirements than conventional mortgages. The minimum down payment is 3.5 percent.
The Home Affordable Modification Program (HAMP) is a government program introduced in 2009 to respond to the subprime mortgage crisis.HAMP [10] is part of the Making Home Affordable program (MHA), [11] established in concert with the Hardest Hit Fund program (HHF) [12] under the Troubled Asset Relief Program (TARP), a part of the Emergency Economic Stabilization Act of 2008. [13]
Rates have fallen, so you decide to refinance to a 15-year loan at 6 percent, cutting your monthly mortgage payment to $2,587 and dropping about $60,000 in interest.