By Les Christie October 24, 2011

NEW YORK (CNNMoney) — In the latest attempt to address the ailing housing market, the government on Monday announced changes to a federal program that will make it easier for struggling homeowners to refinance to today’s near-record low rates.

Under the new program, homeowners who owe more on their homes than they are worth will be able to refinance no matter how much they are underwater, as long as they are current on their payments.

More than 1 million homeowners could get cheaper mortgages as a result, officials estimated.

The revamped Home Affordable Refinance Program (HARP) will also streamline the refinancing process, doing away with certain types of appraisals and underwriting requirements, and reducing or eliminating fees that prevented homeowners from refinancing in the past.

More than 890,000 homeowners have already refinanced under HARP, which is available to borrowers with loans backed by Fannie Mae and Freddie Mac originated before May 31, 2009.

But hundreds of thousands more could not qualify — mainly because of the previous 125% loan-to-value limit on the program or because banks would not take on the risk.

“We know there are many homeowners who are eligible to refinance under HARP and those are the borrowers we want to reach,” said Edward DeMarco, acting director for the Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac.

Currently, about 11 million borrowers are underwater on their mortgages, with about 4.7 million of those loans meeting or exceeding the 125% loan-to-value limit, according to CoreLogic, a financial analytics company.

By the time HARP expires in 2013, the federal housing agency estimates, up to 1 million more borrowers may benefit from the new regulations.

Many of those borrowers will be from states like Florida, California, Nevada and Arizona where home values have been hit the hardest. In metro areas like Las Vegas, for example, prices have plunged nearly 60% from their early-2006 peak.

The new rules and other details have yet to be finalized, but FHFA said that should all be worked out by Nov. 15. Banks may be able to start issuing refinanced loans by Dec. 1.

Lifting the loan-to-value restrictions may still only help a limited number of borrowers, according to Jaret Seiberg, an analyst for MF Global Inc.’s Washington Research Group, which analyzes public policy for institutional investors.

The problem: Mortgage holders still must be current on their payments for the past six months — with no more than one missed payment in the past 12 months –and they also must be able to qualify for a new loan.

However, Seiberg believes, the changes should allow banks to refinance loans without worrying that Fannie Mae and Freddie Mac will force them to repurchase the loans if the borrower defaults.

In the past, banks have been reluctant to refinance loans because they didn’t want to take on that liability, explained Shaun Donovan, the secretary of the U.S. Department of Housing and Urban Development. By doing away with that liability, more lenders will compete to refinance the loans, which he believes will make them more affordable for borrowers.

That should help remove one of the biggest barriers to refinancing through HARP, said Gene Sperling, director of the National Economic Council.

Under the newly-revamped program, Fannie and Freddie will also reduce the fees they have charged in the past in order to enable borrowers to better afford the new loans.

Among the fees that may be reduced or eliminated are those for loan level price adjustments. Going forward, borrowers may not be penalized for less-than-perfect credit scores, for example.

Fees will also be waived for some underwater borrowers who refinance into 20-year or other, shorter-term loans. By doing so, it could help homeowners get above water faster.

A homeowner who has a $200,000 balance on a 30-year mortgage with a 6.5% rate and a home value of $160,000, for example, currently makes payments of $1,264 a month.

If they refinance into a 20-year fixed-rate loan at 4.25%, it will reduce monthly payments to $1,238 and slash the balance to $160,000 in just five-and-a-half years. If they refinance to a 30-year loan at 4.5%, however, their monthly payments will be much lower, $1,038, but it will take 10 years to reach $160,000.

“It’s an opportunity for borrowers to improve their household balance sheets by repaying their mortgages much quicker,” said DeMarco.

Since 2007 I have been giving talks all around the state asking the question “why can’t we get appraisers to assign value to the green features our clients put in their homes?” Until recently the only real green based appraisal criteria we had was a quote from the Journal of Appraisal stating that for every $1 in annual energy cost reduction you get from a green feature you gain $20 in market value. So if you install energy efficient light bulbs that save you a total of $100 a year you can add $2,000 to the value of your home. As you can see that was not a very helpful or nuanced approach to valuing the green features in a home. Now the Appraisal Institute has answered the call and produced a Residential Green and Energy Efficient Addendum.

This three page document gives the appraiser a form to list the green features that are present in the home and, hopefully, force them to take the next logical step which is to assign a market value to those features based on their savings and local market forces. The form is a really good first crack at green appraisals, they didn’t stop short at just listing the features, they have gone deeper allowing you to list the age of the solar panels, the monthly savings results produced and the type an R value of added insulation. These are important details in determining the efficacy and the market value associated with these green features.

What does this mean to you, the homeowner? It means that if you are selling or refinancing your home you need to request that the appraiser use this addendum and let them know that you will be expecting to see a filled out copy of it included in the appraisal. You can then use this form and the valuations associated with it as a marketing tool for your home. It could help you recoup lost value due to market forces by gaining value for the energy efficient upgrades you have done to your home. If your home is certified by a green rating agency such as Green Point Rated or LEED it gives you another place to list that and try to gain market value for having taken that step as well. Even more importantly, it means when your water heater goes out and you are standing at Home Depot deciding between a traditional tanked water heater or the more expensive tankless option and you are calculating the energy savings and trying to decide whether it justifies the increased purchase price, you have yet another reason to make that green purchase–you can have it listed on your appraisal and get some greater market value for your home based on it.

While this will take a while to be widely used it is  a great first step and we should all ask that it be used on our purchases and refinances.

If you’d like to see the form you can view it here:  Residential Green and Energy Efficiency Addendum

–Rich Curtis

Owner, Greenway Properties

Wi-Fi-Connected Lightbulbs, Coming To Smart Homes In 2012

BY KIT EATON - Fast Company

www.landinlotus.com

I just listed 6 great new parcels of land in Lotus and Coloma. These parcels are such a unique opportunity to own land in the Lotus valley that I have launched a micro site at www.landinlotus.com highlighting these listings. Check out the site for pictures, interactive parcel maps, information on the properties and great links to things to do in Coloma and Louts. Check back here soon for individual parcels being highlighted on our blog.

Welcome to the Greenway Properties blog. This will be a space for me to communicate important and interesting information about real estate and green subjects. I will highlight new listings and keep you posted on the happenings in our changing market. Check back often or better yet subscribe to our blog so you get the updates as they happen.

I look forward to consistently bringing you useful, interesting and even fun information about real estate!