Skip to content
Subscriber Only

Obama Blocked by Banks on Mortgage Plan to Stimulate Economy

A U.S. program to help as many as 5 million homeowners refinance their mortgages is being hindered by reluctant lenders, suffering a similar fate to the government’s main foreclosure-prevention effort.

The Obama administration introduced the plan in April 2009 in a bid to prevent defaults among borrowers who were current on their payments but had little or no equity after the average home price had tumbled 33 percent since the July 2006 peak. The Home Affordable Refinance Program, known as HARP, was designed to allow these homeowners, who usually can’t qualify for new loans, to benefit from the lower rates engineered by the Federal Reserve to help stimulate the economy.