HomeStreet Bank Supports Improved Mortgage Relief Program to Allow More Homeowners to Refinance
- With low interest rates and home prices, lending activity continues to increase
HomeStreet Bank Chairman and CEO Bruce W. Williams today voiced support for the Obama Administration’s action to widen the mortgage refinancing programs offered by Fannie Mae and Freddie Mac to help borrowers whose homes have significantly declined in value. The program will allow eligible borrowers whose loans are worth up to 125 percent of their home's value to refinance. Freddie Mac has already implemented Relief Refinance Mortgages in response to this announcement, and it is anticipated that Fannie Mae is soon to follow.
“The administration’s decision to allow Fannie Mae and Freddie Mac to offer refinancing at a higher loan-to-value ratio is both a necessary and commendable action in preventing foreclosures and aiding responsible homeowners who are in need of more affordable payments,” said Williams.
“As a result of the economic climate, some homeowners in the Pacific Northwest and Hawaii face mortgage loans that are greater than the value of their homes,” continued Williams. “By improving affordability and allowing more homeowners the opportunity to refinance at a lower rate, borrowers can potentially save hundreds on their mortgage payments each month.”
The new mortgage program addresses the decline in home values which has caused people to be shut out of the program if they owed more than their homes’ value. Previously, the maximum loan-to-value ratio was set at 105 percent, which did not cover some whose mortgages were more than the value of their home. Now, eligible borrowers will be able to refinance up to 125 percent of their current property value, allowing them to obtain a lower interest rate, a more affordable monthly mortgage payment, and a more secure long-term home loan.
Home Lending This Year Surpasses 2008 Activity as Homebuyers Get Off the Fence
Despite a weak economy, home purchase and refinance activity continues to increase, surpassing lending activity in 2008. HomeStreet Bank has done almost as much home lending in the first six months of 2009 as in all of 2008. To date, in 2009 HomeStreet Bank has closed more than 6,600 home loans, totaling $1.63 billion.
“Homebuyers and current home owners are taking advantage of unprecedented opportunities available in the market, such as very low interest rates, the drop in home prices and new governmental programs,” Williams said. “With all of the opportunities and continued efforts by the administration, HomeStreet anticipates continued strength in home lending this year.”
About HomeStreet Bank
Founded in 1921, family- and employee-owned HomeStreet Bank is one of the largest privately owned banks in the Pacific Northwest and Hawaii. Headquartered in Seattle, the company has assets of $3.1 billion and a network of 30 branch and mortgage offices. HomeStreet Bank is one of the only banks in the country that has consistently received an “outstanding” rating under the Community Reinvestment Act (CRA).