Mortgage Refinancing Initiative to Help Low Income Borrowers

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WASHINGTON – Federal regulator Fannie Mae FNMA, -0.83% and Freddie Mac FMCC, -0.42% are expected to introduce a new program Wednesday aimed at helping more households maintain historically low interest rates, targeting low-income borrowers. income that was lost over last year’s refinancing boom. The Federal Housing Finance Agency, which oversees the two government-controlled mortgage giants, is expected to announce plans to ease credit requirements, simplify documentation and waive certain fees for borrowers looking to refinance their loans. The program is expected to take off in the summer.

“There was an increase in refinancing last year, but more than two million low-income families did not take advantage of historically low mortgage rates by refinancing,” said FHFA Director Mark Calabria. To benefit from the changes, borrowers would have to earn 80% or less of their area median income and have not missed more than one mortgage payment in the past 12 months. The program only applies to borrowers with existing loans backed by the mortgage giants and it will be up to the lenders to participate in it. An expanded version of this article appears on Popular Stories: