Major Changes To The HARP Government Refinance Program Announced
The new HARP government upside down/underwater mortgage refinance program will help some home owners in the Winston-Salem, Clemmons, Lewisville, Kernersville, Advance, and Piedmont Triad areas who want to keep their home and lower their interest rate and mortgage payment.
What is HARP? Well, it’s an instrument, but in this post we’re talking about the Home Affordable Refinance Program. You may have heard it called DU REFI Plus or Access Relief loan….or HARP 2.0 or the Obama refinance. No matter what you call it, it’s meant to help home owners who have NOT fallen behind on their mortgage payments, and their home is worth less than what they owe on their mortgage.
The purpose of the revised or new HARP program is to help people who’s home values have dropped like a ton of bricks take advantage of today’s lower interest rates. The problem with the old HARP refinance program was it had a loan-to-value cap of 125%, many lenders limited it to 105%, and other lenders wouldn’t participate in the program at all.
The anticipated changes to the Home Affordable Refinance Program (HARP) were announced recently. The updates include several but not all of the changes most borrowers have been hoping for. Among the changes are the following:
1. There is no longer a 125% loan to value limit to the program. Going forward HARP loans can theoretically work for any loan backed by Fannie Mae or Freddie Mac regardless of how underwater the home is. This may result in a refi free-for-all if your current loan is owned or securitized by Fannie Mae or Freddie Mac. (act now before mortgage rates go up)
2. A full appraisal will not be required in all cases. Reports are that in some cases an automatic valuation system may be used.
3. Mortgage insurance providers have reportedly agreed to automatically transfer mortgage insurance coverage to the new loan. If this is true it will be a huge change because previously borrowers with mortgage insurance were not able to participate in the HARP program.
Unfortunately, the cut off dates for eligibility were not changed so any loans taken out after May of 2009 are still not eligible for the program.
The FHFA said the operational details for the program will be available by November 15th 2011. That probably means that the new program won’t be up and running with most authorized lenders until December. The question yet to be answered is how many authorized lenders will choose to participate in the new version of the program in the months to come. But assuming several authorized lenders do participate there is no denying that removing the 125% limit and the allowing borrowers with mortgage insurance to participate will open the program to vastly more borrowers.
Do You Qualify for the New HARP Upside Down Mortgage Refinance?
- Income & employment is still verified – can you qualify for your loan on paper?
- Maximum one 30 day late payment allowed in the last 12 months.
- Your loan must have been originated BEFORE 6/01/2009.
- Loan must be owned or securitized by Fannie Mae or Freddie Mac. This is not for people with FHA, VA, or USDA loans.
- Credit score low? No worries, FICO score only impacts the interest rate.
- You don’t have to be upside down to qualify for the HARP loan.
Not sure if your loan is owned by Fannie Mae or Freddie Mac? Look it up right here, right now – Fannie Mae Lookup or Freddie Mac Lookup
If it is, you may want to find a local mortgage company or bank that will be able to help you.
If it isn’t, we should have a come-to-Jesus meeting. OK, I’m kidding…sort of 
Unfortunately, there is not a government program to help you at this time. If you want to consider other options, such as short selling/walking away, or figure out how long it will take for your home to regain it’s lost value and get back to 100% LTV, call or text me @ 336.287.4423.
Tony Green, Realtor
Tony Green is REALTOR® who works in Winston Salem, Clemmons, and Lewisville NC and the owner/broker of EXIT Realty Elite. He attended Appalachian State University (go App!) and graduated with a BSBA in finance and real estate. He likes walks on the beach, cute little puppies, and smash mouth wrestling...and maybe a little humor from time to time. :D Tony looks forward to serving you and helping you with your real estate needs.
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About Tony Green, Realtor
