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Homeowners Turning Down Refinancing Options

Since the housing market crashed in 2008, millions of Americans were left underwater on their mortgages. Last year, the federal government began installing programs to help underwater homeowners. One of the programs that was set in place in 2010 but revised several times since, the Home Affordable Refinance Program (HARP) was specifically designed to help homeowners who were underwater on their mortgages but still current on their mortgage payments. The changes made to HARP last year made it much easier for homeowners to qualify. Since these changes were made, mortgage lenders have aggressively tried to let underwater borrowers know about this opportunity to save money by refinancing, however few homeowners are taking the bait.

Mortgage originator, Quicken Loans, says that only about 25% of their qualifying homeowners have actually refinanced. The federal government and mortgage originators believe that homeowners are not taking advantage of the program because they are wary of being “bitten” again. The wounds from all of those who fell victim to no-money-down loans and balloon payments have left many borrowers cautious of any offers made by lenders. Analysts say that it is a shame that so few borrowers are refinancing through HARP since it was specifically designed to reward good borrower behavior.

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