Government throws lifeline to underwater homeowners

Help is on the way for homeowners who have managed to hang on, even though their homes are well underwater.  The program is the first of its kind for those who are not behind on their payments.

The town house looked like a solid investment in the red hot market of 2005.

But by 2011, her home lost $150,000 in value.  But Jenna Clements stuck it out and made every payment.  “We did not qualify for a modification because -- number one, we were not behind on payments, and we did not want to do a short sale,” said Clements.

But the new HARP program aims to refinance mortgages for underwater owners like Clements who managed to keep up with their payments and hold on to their jobs.

This portion of HARP which stands for Home Affordable Refinance Program does not roll out until January but the phones are already ringing at Tampa Bay CDC, a HUD-backed housing counseling agency .

Here's how it works. Let's say you have a $200,000 mortgage at 6.25 percent and you qualify for the program. If the bank lowers your rate to 4.25 percent, that is a savings of $249 a month.

Still, Tampa Bay CDC’s Vice President Bill Sanchez worries the program’s requirements will exclude many.  He points out applicants can not have been late on a payment more than once in the last 12 months and the loan must be backed by Freddie Mac or Fannie Mae.

But for homeowners like Clements, the program means hope of relief for the first time since the housing market bubble burst.

If you have questions or want to find out how to apply, contact the Tampa Bay Community Development Corporation at 866 608 3220 or look them up at tampabaycdc.org