Researchers said that new HARP modifications could lead to roughly $35 billion in savings for homeowners, a number that could help stem the rate of foreclosure activity nationally.
The savings could result in a windfall for certain states, especially those that continue to feel the brunt of foreclosures and state budget shortfalls.
The researchers found that cash-strapped California could see more than $5.6 billion in annual savings, the most of any state, with about 1.3 million homeowners eligible to refinance under new conditions. Californian homeowners who refinance under new the new program would save $4,133 on average.
Other hard-hit states that could rake in billions in annual savings include Florida ($3 billion), New York ($2.6 billion), Texas ($2.5 billion), Illinois ($1.8 billion), New Jersey ($1.7 billion), and Georgia ($1.3 billion), among others.
The researchers said that a boon for refinance opportunities could stem the tide of foreclosures. According to their report, more than 2.7 million homeowners had lost their homes to foreclosure by February this year, with many more on their way down the pipeline.
“At a time when agreement is rare in Congress, everyone should come together to encourage more refinances,” said Mike Calhoun, president of Center for Responsible Lending, which posted the report Thursday.
“We urge Congress to go forward with this legislation as it is, with no controversial side provisions that could derail this important bill or undercut consumer protections,” he added.
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