HARP 2.0 (Home Affordable Refinance Program)

On October 25, 2011, President Obama announced changes to the HARP program that may help more homeowners who are unable to obtain traditional refinance because the value of their home has declined.

Below is some information on HARP and the new guidelines that may help you start a dialogue with your servicer (the company who holds your loan and to whom you write your payment checks) or a local lender participating in HARP to see if you qualify for a HARP loan.

What is HARP?

HARP stands for the Home Affordable Refinance Program.  HARP was rolled out in 2009 to help borrowers who were current on their mortgage payments, had loans backed by Freddie Mac and Fannie Mae, and wanted to refinance but didn’t have enough equity in their homes to do so because the value of the home had declined.

The HARP program is designed to help qualifying homeowners refinance into a new mortgage at current (lower) interest rates.  A HARP loan is a new loan, not a modification of your current loan.

What is HARP 2.0?

Several changes have been made to the program to help more homeowners qualify for the refinance opportunity and help lenders manage the refinance process more efficiently.    Homeowners who are “underwater” – meaning their LTV (Loan-To-Value) is more than 100%.  That means the amount of your current mortgage is  MORE than the value of your home, you are now eligible to explore refinancing your home under HARP.

Example:  You owe $130,000 on your mortgage (this is your Loan Amount) Yet the value of your home is $100,000 (this is the current value of your home) Your LTV is $130% (you owe $30,000 more than your home is currently worth)

How do I know if my loan qualifies for the HARP program?

There are some basic guidelines you should check before contacting your servicer or lender to see if you qualify for HARP:

•    You must have originated your loan before May 31, 2009

•    Your loan must be owned or guaranteed by Fannie Mae or Freddie Mac

•    You must be current on your mortgage payments, and have not made a payment more than 30 days late during the past year

•    You must demonstrate the ability to continue making payments on the loan (demonstrate that you have a job or other consistent source of income)

•    You must owe more on your mortgage than your home is worth (see LTV definition above)

•    A refinance must help the affordability or stability of the loan (this means the refinance must make the loan either more affordable, or make the payments more consistent over time


If I have already refinanced under HARP, can I refinance under the program again to take advantage of even lower interest rates?

Unfortunately, no.  Once you have refinanced your home under HARP, you will not have another chance to refinance under the program.

How much will it cost to refinance under HARP?

While the costs to refinance have changed under the new HARP guidelines, each borrower is different and you will need to work with your lender to get specific information about your situation.


When can I apply for refinancing under the HARP program?

Final information and details are expected to be announced in mid-November and some servicers expect to begin accepting applications under the new HARP program in early December.  You should check with your servicer in November to find out more specifics.  The deadline to apply for HARP has been extended through 2013.


Are second homes eligible for HARP?

No.  The HARP program is only available for your primary residence.


What if I have a second mortgage on my home?

Borrowers with a second mortgage (example:  A Home Equity Loan or a balance on their Home Equity Line of Credit) may be able to participate in HARP, your servicer or lender will be able to help you determine if your second mortgage owner will agree to “re-subordinate” that loan before you can refinance the first mortgage.


How do I know if Fannie Mae or Freddie Mac own or guarantee my loan?

You can use the links below to help determine if Freddie or Fannie own or guarantee your loan.

http://www.fanniemae.com/loanlookup/

http://www.freddiemac.com/mymortgage/


Who can help me with a HARP Loan?

Please contact us for more Information about refinancing with a harp loan.

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