Good news for owners and buyers

Last week showed signs that the economic recovery may not be as strong as hoped. One indicator is the reduction in mortgage interest rates for the second consecutive week, down to 4.14 percent from 4.17 the previous week. Mortgage rates of course, have an impact on the housing market as lower rates mean more borrowers can qualify for home loans. Lower rates also mean lower payments and for many, more home for their money.

Then, the president signed legislation that extends the Home Affordable Modification Program for another year, through December 2016. That program, HAMP, was supposed to expire the end of this year. Now, homeowners who still may be having trouble making payments under their current mortgage terms have another two years to renegotiate their mortgages.

Called a boondoggle and waste of taxpayers' money by some, the program has reportedly helped more than 1.3 million homeowners. Still, of the $29.9 billion in bailout funds allocated for HAMP and other housing programs, the Treasury had spent only about $5.2 billion through March.

The program, designed to assist underwater homeowners or those who are facing other hardships is not without opposition. HAMP has been faulted by both Democrats and Republicans and by federal watchdogs for the high number of recipients who default on mortgages after getting the government aid.

But of those 1.3 million families who have been helped, a majority have been able to hold on to their homes rather than losing them to foreclosure. Foreclosed properties typically sell at a discount and put downward pressure on housing prices which can have a negative effect on neighbors who have no mortgage trouble when they attempt to sell their homes. Until recently we have seen the problem firsthand here in North Idaho as the number of foreclosures rose, driving down the conventional market prices.

Now that we have absorbed much of that foreclosed inventory, we have seen consecutive months of appreciation allowing even more homeowners to outlive their own underwater status and again build equity as most intend to do when they purchase a home.

"The housing market is gaining steam, but many homeowners are still struggling," said Treasury Secretary Jack Lew. "Extending the program for two years will benefit many additional families while maintaining clear standards and accountability for an important part of the mortgage industry."

The program, which draws from the Treasury Department's financial bailout fund, pays lenders and loan servicers to rewrite loan terms for borrowers who cannot make their current mortgage payments.

The administration has refined the program since its inception to broaden its reach, including expanding eligibility and increasing payments to mortgage companies that lower borrowers' monthly payments. This expense to taxpayers is the primary objection of the programs opposition. When compared to the losses caused by foreclosed inventory we wonder if there isn't some kind of balance. Consider too, the cost of housing and feeding many of those displaced from their homes.

Now, with this extension homeowners in trouble may have time to renegotiate their mortgage terms provided they meet the government guidelines of hardship. For them at least, this is good news.

Trust an expert...call a Realtor. Call your Realtor or visit www.cdarealtors.com to search properties on the Multiple Listing Service or to find a Realtor member who will represent your best interests.

Kim Cooper is a real estate broker and the spokesman for the Coeur d'Alene Association of Realtors. Kim and the association invite your feedback and input for this column. You may contact them by writing to the Coeur d'Alene Association of Realtors, 409 W. Neider, Coeur d'Alene, ID 83815 or by calling (208) 667-0664.