Changes to HARP Program Announced

(No Video for this one. Just some basic information on HARP 2.0 refinance program. Look for a video from me when we know more details on HARP 2.0.)

You may have heard Monday that President Obama presented a plan to open up refinancing to more homeowners who are underwater. I have received several calls asking about the proposed changes and wanted to reach out to everyone to explain what is happening.

First, it’s important to realize that the President’s proposal is not a new program, but a revision to the current Home Affordable Refinance Program (HARP). However there is one big change: Now homeowners can refinance no matter how underwater they are! Before homeowners could only refinance if they were 25% or less underwater, and even then many banks only let people who were 5% or less underwater refinance.

Also, with this revision it’s possible that an appraisal won’t have to be performed, which is great news, as it will save time and money. But this is only the case if Fannie Mae or Freddie Mac can electronically estimate the value through their valuation models.

Keep in mind that these updates to HARP apply only to people whose mortgage is currently secured by Fannie Mae or Freddie Mac on or before May 31, 2009. So if you have refinanced or bought a home since May 2009 you unfortunately will not qualify to refinance under the HARP revision.

Also, if you have a second mortgage or pay mortgage insurance currently, that too could effect if you qualify for the HARP refinance program.

As of now, the revisions to HARP have been proposed by President Obama and the Federal Housing Finance Agency (FHFA), which regulates Fannie Mae and Freddie Mac. This directive has been given to Fannie Mae and Freddie Mac and they now have until November 15, 2011 to give guidance and details regarding how these changes will be run.

To see if your loan is secured by Fannie Mae or Freddie Mac and if you would qualify for the current HARP program or the revised HARP program, please contact me. I’m always very happy to help.

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