(Adds further Watt comments, details, paragraphs 4-7)
WASHINGTON, May 8 (Reuters) - Fannie Mae and Freddie Mac's regulator on Friday extended for another year the mortgage finance firms' participation in the U.S. government's main foreclosure prevention programs.
The decision, announced by Federal Housing Finance Agency Director Mel Watt, extends the Home Affordable Mortgage Program and the Home Affordable Refinance Program through the end of 2016.
"These programs have provided critically important relief for many borrowers by allowing them to lower their monthly payments and, as a result, have prevented many foreclosures," Watt said in remarks prepared for delivery to a conference in Los Angeles.
Watt noted that the two program, which were put in place following the housing bust, had been helping fewer and fewer borrowers over time. Still, he said, lenders continued to participate and more borrowers could benefit.
He estimated that 600,000 borrowers could be helped by HARP alone. HARP allows borrowers with loans backed by Fannie Mae and Freddie Mac to refinance at lower interest rates even when the homes have lost value.
HAMP, in contrast, provides incentives for lenders to alter mortgage terms to make them more affordable.
Watt said the programs were never meant to be permanent and that it would be the last extension for HAMP and likely the last one for HARP as well.
(Reporting by Timothy Ahmann; Editing by Bill Trott and Will Dunham)