Easing the Path To Refinancing

    A White House effort to expand help for homeowners who have been unable to refinance mortgages because the value of their properties has fallen could have a stimulating effect on the year-round East Hampton economy.
    With its outsize economic reliance on real estate transactions, East Hampton is a bit of a company town. And, like many other communities in the United States that have suffered in the long recession, it has seen a significant slowdown in many of the related trades.
    The East End of Long Island has not had the level of walk-away foreclosures as some parts of the country, but a lot of people, particularly those whose properties are in the mid- or relatively low-priced range, are hurting. Mortgage arrangements that might have made sense before 2008, when the sky seemed the limit for housing prices, now are a burden for an unknown number of residents and part-timers. Those who have struggled to keep their houses or protect their nest eggs have tied up cash that could be used for other things — spent locally perhaps instead of being shipped to some distant lending institution.
    The idea of mortgage relief for hard-strapped borrowers has been around for a while in one form or another. The new version of the Home Affordable Refinance Program makes it easier for borrowers who have not fallen behind on payments to refinance and eases certain restrictions on banks. By opening up the refinance market, more homeowners could take advantage of record-low interest rates or lengthen their mortgage terms. Monthly payments could be reduced by hundreds of dollars and household cash freed for purchases or long-delayed home improvements. 
    Some critics of HARP, now HARP 2, have said it is not ambitious enough. Although some 22 million American households would meet eligibility requirements; only about 900,000 of them are expected to take advantage of the new rules. It also remains to be seen if enough lenders will be confident enough to go along with the federal program for borrowers whose loan amounts come close to the appraised value of their properties.
    House prices have not fallen in East Hampton to the degree they have in parts of the country most affected by the downturn. But borrowers here may soon find the path to refinancing eased by the HARP expansion, and that can only help brighten the local economy.

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