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HARP Refinance still going strong in MN and WI

The Federal Housing Finance Agency (FHFA) special underwater refinance program, commonly known as HARP (Home Affordable Refinance Program) is still going strong.

HARP refinance in MNWhile mortgage rates have risen a bit, there are still millions of people who could take advantage of the program to save significant money on their monthly mortgage payments.  Because of this, the FHFA had Fannie Mae and Freddie Mac extend the HARP program by two years to December 31, 2015. The program was originally set to expire December 31, 2013.
More than 2.2 million homeowners have already refinanced through HARP since HARP was introduced by FHFA and the U.S. Department of the Treasury in April 2009.  HARP is uniquely designed to allow borrowers who owe more than their home is worth the opportunity to refinance their mortgage.Extending the program will continue to provide borrowers opportunities to refinance, give clear guidance to lenders and reduce risk for Fannie Mae, Freddie Mac and taxpayers.
In addition, FHFA will soon launch a nationwide campaign to inform homeowners about HARP. This campaign will educate consumers about HARP and its eligibility requirements and motivate them to explore their options and utilize HARP before the program ends.

To be eligible for a HARP refinance homeowners must meet the following criteria:

  • The loan must be owned or guaranteed by Fannie Mae or Freddie Mac.
  • The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
  • The current loan-to-value (LTV) ratio must be greater than 80 percent.
  • The borrower must be current on their mortgage payments with no late payments in the last six months and no more than one
  • late payment in the last 12 months.

Check here to see if your loan is owned by Fannie Mae or Freddie Mac

Less underwater homes as values increase

banner_ad_appraisalUnderwater Mortgages Drop by 850,000

Minneapolis, MN:  Millions of homes went underwater at the beginning of the real estate and mortgage crash. Underwater homes, where the owners own more on the mortgage loan than the home is currently worth, have been a thorny issue, preventing many people from refinancing to today’s low mortgage rates, or from selling their homes.  If has also cause many people to throw in the towel and simply walk away from their home.

CoreLogic, a real estate data firm has reported that an estimated 850,000 homes are no longer underwater in the first quarter of 2013 due to rising home values.  They also reported that another 11.2 million homeowners are now in a “low equity” position, which means they are no longer underwater, but have only a little equity.

This means an estimated 9.7 million homes, about 1 in 5 are still underwater.

Another 11.2 million homeowners were in a low-equity situation, not underwater on their mortgage but with less than 20 percent equity in their homes, a situation that can make refinancing difficult or more expensive.

Rising values

The combination of low mortgage rates, and less foreclosures on the market has help boost values and increased sale prices the past year.  In the metro Twin Cities area of Minneapolis / St Paul, average home values have risen 15.1% in the past year alone.

Real Estate is local

Just a few states account for the almost 1/3rd of underwater homes. Florida, Michigan, Arizona, and Georgia. Many people in the Twin Cities are now able to sell and move up to a bigger home, or to easily take advantage of low mortgage rates again, especially with programs like HARP, the Home Affordable Refinance Program, which was specifically designed to assist underwater homeowners who got their current mortgage loan prior to June 1, 2009.

Refinance with no appraisal

appMinneapolis, MN:  As mortgage interest rates fell to all-time lows earlier this year, even underwater homeowners were able to take advantage of refinancing through mortgage programs that do not require a property appraisal.

No appraisal refinances make the refinance process easier than ever, especially for those homeowners that own more than their home is worth.

Some of the most popular no-appraisal refinance programs include the FHA streamline refinance and the HARP (Home Affordable Refinance Program).  Other no-appraisal refinance programs include the VA streamline or VA Interest Rate Reduction Refinance Loan and the USDA streamline refinance.

While many home values are on the rise across the United States, many homeowners continue to owe more than their home is worth and are unable to qualify for a traditional refinance to lower their interest rate. Under theses streamlined no-appraisal refinance programs, homeowners are able to successfully lower their interest rates without assessing their home’s value.

On average, homeowners that take advantage of a no appraisal refinance program are able to yield a savings of about 35 percent. If your home is currently underwater and you have not been able to qualify for a traditional refinance, look into a no appraisal refinance.

HARP Refinance program extended to 2015

underwaterMinneapolis, MN:  The Federal Housing Finance Agency (FHFA) has directed Fannie Mae and Freddie Mac to extend the Home Affordable Refinance Program (HARP 2.0) by two years. The program was to expire at the end of 2013, but will NOW expire December 31, 2015.

The program is being extended so more underwater homeowners can benefit from refinancing to today’s low mortgage interest rates.  Already, some 2 million plus homeowners have successfully refinanced their homes using the HARP 2 refinance program.

FHHA also announced they will be launching a nationwide campaign to inform homeowners about HARP refinances, and eligibility requirements.

LEARN MORE about the HARP Refinance Program

To be eligible for a HARP refinance homeowners must meet the following basic criteria:

  1. The loan must be owned or guaranteed by Fannie Mae or Freddie Mac (Check and see for free)
  2. The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
  3. The current loan-to-value (LTV) ratio must be greater than 80 percent.
  4. The borrower must be current on their mortgage payments with no late payments in the last six months and no more than one late payment in the last 12 months.

If your current loan is an FHA Loan, or a VA Loan, you also have refinance options if your home is underwater with a FHA Streamline Refinance, or a VA IRRRL Streamline Refinance.

 

Can’t refinance – Maybe you can with HARP – Find out here

HARP 3.0 ???  Help for underwater home owners

St Paul, MN:  Virtually, all homeowners have lost value on their homes in recent years.  For many, this has created some challenges to refinancing and taking advantage of today’s super low mortgage interest rates.

There are a few programs with can help, depending on what type of mortgage loan you have today.  May people have successfully used program like HARP (Home Affordable Refinance Program), the FHA Streamline Refinance, or even the VA Streamline refinance known as an IRRRL loan.

Sadly, not everyone fits the criteria.  Therefore Washington has been floating the idea of an expanded HARP 3 Refinance ProgramIt doesn’t exist yet, and may never exist…  But if it does, here is what it may look like:

There are some basic criteria for the #MyRefi or HARP 3 refinance program:

  • Current loan is NOT backed by FHA, USDA, Fannie Mae, Freddie Mac
  • Primary home only. No second homes or investment home
  • Loan less than $750,000.
  • On time mortgage payments for the past 6 months, with no more than one 30-day late payment in the past year.
  • Credit score above 580

This new HARP 3 refinance program proposal mirrors the current HARP 2.0 refinance loan program (possible no appraisal, less document, etc), except it would potentially also allow any underwater home owner, not just those who have a loan owned by Fannie Mae or Freddie Mac.

Try out the governments “Would I qualify for a refinance” below..

Has your Minneapolis area home LOST VALUE? HARP 2.0 can help you refinance!

Has your Minneapolis area home LOST VALUE? HARP 2.0 can help you refinance!

Minneapolis, MN:  What is HARP? HARP stands for Home Affordable Refinance Program, an initiative from the Federal Housing Finance Agency (FHFA) to assist homeowners whose homes are now worth less than what they owe.  And just recently, new enhancements to the program were announced, making refinancing options available again to an estimated one million more homeowners.

If you are a responsible homeowner but the current marketplace loan-to-value (LTV) requirements and need for a new appraisal have made it difficult or impossible for you to refinance at today’s record low interest rates, lenders may be able to help you without needing a new appraisal or meeting previous LTV requirements.

The HARP “Special Refinance Program,” is designed to help up to 9 million American families refinance their loans to a payment that is affordable now and into the future. This program is aimed at helping responsible homeowners “refinance” their loans to take advantage of historically low interest rates. Here are some common Questions and Answers about the Refinancing Initiative in the program.

You may be eligible for a HARP 2.0 refinance if:

  1. The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
  2. The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
  3. The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
  4. The current loan-to-value (LTV) ratio must be greater than 80%.
  5. The borrower must be current on the mortgage at the time of the refinance, with no late payment in the past six months and no more than one late payment in the past 12 months.

If you answered YES to these questions, Click HERE to Apply for a HARP Refinance in the Minneapolis, MN area.

 

Should you refinance, modify, buy, or run away?

Saint Paul, MN: These are certainly trying times, and 70% of homeowners have some sort of financing on their home. The economy is hurting, and fear of job loss is on many minds. But what you should be doing in today’s market isn’t always clear.

The economy is hurting largely because of the initial wave of foreclosures and high gas prices of earlier in 2008. This has spilling over into all aspects of American lives, but is it really as bad as the constant beat of the media drum has one to believe?

Unemployment nationwide is averaging in the 8% range. This is significantly below the highs of years past. Foreclosures are still at historic high levels. These reports sound bad, but sit back and take a look at your own individual lives to examine if it really is bad for you and what you should be doing.

For example, while possible job loss is on a lot of minds, examine your own ability to market yourself? No job is guaranteed. If you did lose your job, how quickly can you replace it with a similar income, even if in a different field.

I am in the mortgage business, which clearly is suffering. I don’t worry about my home or income, because I know that if needed, I would take two or three jobs (even menial jobs) to always make sure my family has the three most important items: Shelter, food, and clothing. I know I can cut off cable TV, sell cars, cut expenses, and go into survival mode and that I will always be able to provide the basics.

If unemployment is averaging 8%, this means 92% of people are working. If foreclosures are averaging 10% of homes, this means 90% of people are OK. Turn off the TV, stop reading the paper. If you didn’t hear and read all the “bad news”, how would YOU personally view your situation?

BUYING A HOME: We all need a place to live. Home prices are extremely attractive, with great deals to be found everywhere. Mortgage rates are near historic lows. If you have OK or better credit, can come up with a small down payment, plan on staying in the home for at least four years, you are almost foolish to not buy something TODAY.

MODIFYING YOUR EXISTING LOAN: Many people bought homes they shouldn’t have and took risky loans to do so. Simply because a lender said yes, doesn’t mean you should have. Even more people who originally bought right used their homes as ATM machines, with a constant “cash out” refinance to pay credit cards and live lifestyles they couldn’t afford. I just spoke with a customer who bought this home 15-years ago for $85,000 who is losing it to foreclosure owing $300,000.

As little as two years ago, getting a bank to modify your loan was rare, and required you to be seriously behind in payments. Today, banks are very willing to help keep you in your home by modifying your payments. Workouts vary greatly depending on many variables, but the best ones we see lower your rate to around 3% for 5-years. Then the rates start adjusting back to where they originally were.

Unfortunately, we are seeing two problems emerge with modification. The first, is many people who got loan modifications fairly quickly fall behind again. While no one wants to lose a home, you must be realistic. Many times I speak with people where I calculate a payment based on ZERO percent, and they still tell me they can’t make the payment. Modifying only delays the inevitable. Getting out completely and into a situation you can afford releases untold weight off your shoulders.

REFINANCING YOUR EXISTING LOANMinnesota refinance rates are currently hovering near historic lows and it is well worth thinking about getting something better if you qualify. The basic criteria is that if you can lower your rate and you’ll be there long enough to at least break even on the closing costs, then it is a smart move.

Today, programs like VA IRRRL streamline refinancesFHA streamline refinances, and HARP 2.0 loans make refinancing available to most people.

So, should you be buying a home, modifying your existing loan, refinancing, or running away? It all depends, but I suggest we all stop living in fear, properly analyze our lives and personal situations, take our heads out of the sand, and make well educated decisions to put our lives in a better place.

An original article by Joe Metzler (C) 2012 Metzler Enterprises, LLC for www.MnRealEstateDaily.com

Can a HARP refinance help you?

Can a HARP refinance help you?

Minneapolis, MN:  A HARP refinance, in short, allows you to refinance with expanded eligibility requirements in regards to loan-to-value, or debt-to-income. That could mean that you are allowed to refinance, even though your home may have lost value., or the payment is a bit higher than normally allowed for your income. That flexibility allows many homeowners to refinance when they otherwise would not be able to. The idea is that even though the new loan might be a risky loan compared to other loans files with lower ratios it is still less risky than just leaving the home owner in their current position. Fannie Mae or Freddie Mac is on the hook for your loan if it’s a HARP refinance, so they want to allow you to get a lower payment and be in a position where you are less likely to default on your mortgage.

What do I mean exactly by expanded eligibility?

Well, Fannie Mae and Freddie Mac have what we call Automated Underwriting Systems. Fannie Mae and Freddie Mac each have their own system and they have certain thresholds that are known in the industry. For instance, we know that a total debt ratio of 45% is a very important number. Why? Normally, if your total debt ratio is over 45% then you are denied. On new loans, these systems will both issue approvals up to a 50% total debt ratio but if you are over 45% you need to have what we call “compensating factors” to get approval. With a HARP loan this 45% number is basically thrown out the window and the Automated Underwriting Systems are much more flexible with their approvals.

Loan to value ratio is also very important in any loan transaction. The normal rules are if the property is your primary residence then you can have as little as 3.5% equity and you can refinance. If the property is a rental then you’ll need 25% equity to get a refinance.  HARP allows you to be significantly underwater and still get the loan done. That means instead of having to have equity in the property you can have a property that is worth less than what you owe and still refinance.

MY LENDER said NO to HARP

Understand this important fact, Fannie Mae and Freddie Mac do NOT do loans. They BUY loans from lenders. Not all lenders feel the same about the risk to them about doing HARP refinances. Most lenders are very conservative today.  Keep in mind that lenders can have “overlays” to the basic HARP guidelines that restrict what that company decides to refinance. You don’t have to go through your current lender to get a HARP 2.0 refinance done.  Shop around to find the best HARP mortgage interest rate just like you would with any other refinance. And good luck!

An original article by Joe Metzler (C) 2012 Metzler Enterprises, LLC for www.MnRealEstateDaily.com

Dealing with an Underwater Mortgage

Nearly 11 million Homeowners are Underwater, which means they owe more on their mortgage than their property is worth. Below are some of your options for dealing with an underwater mortgage.

Wait It Out:  If you are just depressed at the thought of owing more than it is worth today, but really don’t have any intentions of moving. Stop worrying about it. You have to live somewhere. Although short sales and foreclosures have brought down values, the housing market is slowly recovering, especially here in the Minneapolis, St Paul metro area. If you are able to continue to make payments – do it. It will save your credit score and keep your morale intact.

Refinance: If your loan is owned by Fannie Mae or Freddie Mac, and that loan was taken out before June2009, you have no late payments in the past six months and no more than one late payment in the past 12 months, you may qualify for the HARP – Home Affordable Refinance Program. If you have an FHA loan, or a VA loan

, you may qualify for a FHA streamline refinance, or a VA IRRRL streamline refinance. Both of these program may not need an appraisal.

Short Sale: If you truly cannot pay your bills, or need to move, you may need to consider a short sale in order to avoid foreclosure. Work with an experienced short-sale Realtor to get the best offer.

Become a landlord: A popular option is to turn the property into a rental. Being a landlord isn’t overly difficult. If you don’t want to deal with it, there are plenty of reliable rental companies that will take care of everything for you. There are special requirements for getting a new home mortgage loan when turning your existing home into a rental, so be sure to discuss this with a licensed mortgage professional, not just a bank application clerk,

 

HARP 2.0 is really HARP point NO for many people

HARP Refinance – The first few months

HARP 2.0 has been in place for awhile now, and although I have helped several people refinance their underwater loans with the HARP 2.0 loan program, it has actually been a bit disappointing. As typical with government programs, the reality of HARP 2.0 falls short of the perception.

When the program was announced back in October, 2011 it sounded like everyone – no matter what their loan to value or their income would be able to refinance at today’s low interest rates.

When the program moved full steam ahead in March, 2012, many people have been left on the sidelines wondering why they can not qualify, or why they have been denied. Many people with loan-to-values over 105% or with private mortgage insurance are finding their options even more limited.

Here is what I have learned about HARP 2.0 so far…

  • Freddie Mac. For a while it was almost impossible to get an “Approval” through Freddie Mac’s automated underwriting engine. They supposedly have tweaked their system, so if you have a Freddie Mac loan that was denied just weeks ago.  Try again.
  • Unlimited Loan To Value Guidelines – When the guidelines of HARP 2.0 were release last year, they announced that loan to value restrictions were being removed. Although this was the guidelines of the program, most of the large lenders are limiting the loan to value.
  • Appraisal Waivers – The appraisal waivers come from Fannie Mae and Freddie Mac. Each have their own automated valuation systems that determine their estimated value of a property. If the automated system accepts your estimated value of the property, then no appraisal is needed. Keep in mind that not every HARP 2.0 refinance will qualify to have the appraisal waived, and that we are seeing very loan “automated” values.

To read more about the reality of HARP 2.0

HARP 2 refinance program in MN and WI

HARP 2.0 refinance program details in MN and WI.

St Paul, MN: The much anticipated revised HARP Refinance Program (HARP 2) is now in effect, making it much easier for underwater home owner to refinance their mortgage into today’s low mortgage rates.

The two biggest guideline changes to the HARP 2 program include the POSSIBILITY of unlimited Loan-to-Value and the POSSIBILITY to refinance even if you have Private Mortgage Insurance (PMI). This opens up financing opportunities for seriously upside home owners who have kept up with their current mortgage obligations.

There is a LOT of misinformation out there... The reality is NO LENDER ANYWHERE can promise you a HARP 2 refinance approval WITHOUT having a full application and submitting that application through either Fannie Mae or Freddie Macs automated underwriting computers (AUS).

 

Why you should wait for HARP 2.0

Why you should wait until April to get a HARP 2.0 Loan

Just a few years ago, consumers with weaker credit getting a conforming mortgage loan (one designed to be sold to Fannie Mae or Freddie Mac) got a great deal.  If you barely qualified with a low 620 credit score, you got the exact same rate as someone with an excellent 800 credit score.

Wait for better HARP 2.0 Interest Rates

When the mortgage markets collapsed and the housing agencies started hemorrhaging cash, they instituted new fee policies known as Loan Level Pricing Adjustments (LLPA) and Adverse Market Delivery Charges (AMDC) as a means to fix their balance sheets on the backs of homeowners that were still able to obtain loans.

The fees were intended to price loans based on the risk inherent in each loan. LLPA is the more significant of the two fees. It adds fees to a loan based on loan type (purchase, rate and term refinance or a cash out refinance), loan to value, and credit score. To illustrate the impact of the LLPA, a borrower with a 620 credit score will pay a rate nearly 1% higher than a borrower with a 740 credit score.

Because of the inherent risk of HARP refinance, most consumers over 80% loan-to-vale have been hit hard by AMDC and LLPA requirements

HARP 2.0 – Best Change Worth Waiting For

As part of HARP 2.0, AMDC and LLPA rules have been changed, providing consumers who wait a potentially much better interest rate.

  • Reduced fees charged by the agencies on loans with a loan to value in excess of 80%.
  • On loans with amortizations of 20 years or less, the LLPA and AMDC are eliminated.
  • On 25 and 30 year loans, the cap is reduced, which means the borrower with the lower score in the example above saves another .25% in rate.
  • Removal of loan to value cap on fixed rate mortgages (effective March 17th 2012) – no equity, no problem. In fact, negative equity refinances will be allowed.

Eliminating the fees on 15 and 20 year loans is significant. Rates on those loans are already well under 4%, so this should open up HARP refinance opportunities for borrowers that are interested in the rapid principal reduction that comes with shorter amortization mortgages.

Not Until After March

When lenders underwrite loans, the first step is to log into Fannie Mae or Freddie Macs computers to get an underwriting decision. These two agencies have indicated lenders won’t be able to do that until sometime around March 17th. To get the better mortgage rates from HARP lenders, you need to wait!

One caution about the changes to the loan to value cap; sometimes lenders do not adopt changes announced by the agencies word for word. Some overlay their own underwriting guidelines and they are always more conservative. While Fannie and Freddie may state they don’t have a loan to value limit for fixed rate HARP loans, many lenders will have a cap.

The agencies continue to tweak their programs with the goal of improving the performance of the loans in their portfolio. If you haven’t refinanced yet, maybe this change is the one that will benefit you.

HARP II Guidelines Released

HARP II – The Home Affordable Refinance Program has released the updated program guidelines.

St Paul, MN:  The HARP program, while not perfect, has been one of the few success stories in the governments attempt to help home owners.  HARP has helped close to 1,000,000 homeowners refinance, and a few tweaks to the program have just been announced. No one who closely follows the mortgage industry is expecting HARP 2.0 to generate much in the way of additional refinance opportunities in the real world over the existing HARP program – but HARP IS STILL AN AWESOME PROGRAM for those who qualify.

That view seemed to be reinforced after yesterday’s release of the specific program guidance from both Fannie Mae and Freddie Mac to lenders (see links to release below)

It appears the updated HARP programs latest program changes and enhancements aimed at allowing underwater borrowers with Fannie / Freddie mortgages to take advantage of low mortgage rates don’t appear to represent a major departure from the old requirements.

The updated basics are that the loan to value cap has been lifted, certain fees in certain situations have been removed and for borrowers who have loans owned by Fannie or Freddie and who have not been delinquent more than 1 x 30 days in the past twelve months (0 x 30 in the most recent six months) they may find refinancing available to them even if they are underwater on their mortgage to equity ratio.

However, until March 2012 Fannie and Freddie will not even accept delivery of any loan with an LTV > 125%.  And, the new loan program continues to be available only to borrowers whose loans are owned by Fannie Mae or Freddie Mac on or before May 31, 2009.

Given the lifting of the Loan-to-Value cap as a major selling point, it appears that since nothing above 125% can be delivered before March this will hamper a program that already has performance characteristics that may make it unavailable to many who could really use the program.

While a handful of lenders who offer HARP already have started to promote HARP refi opportunities, it seems a bit premature as it remains to be seen who lenders will actually implement the new guidelines.  Remember, lender overlays play a huge rule in today’s mortgage world.  Just because Fannie Mae, Freddie Mac, FHA, VA, or any other program says lenders can, doesn’t mean they will.

View the actual HARP 2 release information in PDF format:

Time will tell over the next few months as lender roll out their actual guidelines.  Stay tuned.

 Click HERE to apply for a HARP Refinance on properties in MN or WI

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HARP 2: Another Obama Housing Refinance Failure?

The Federal Housing Finance Agency plan to revamp the Home Affordable Refinance Program will result in just 17% of Fannie Mae and Freddie Mac 30-year loans qualifying for refinancing, according to one analyst.

Sarah Hu said there are some benefits of HARP 2.0, which is how bond investors refer to the plan, but also believes hurdles remain.

READ THE FULL STORY

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HARP 2. Underwater Refinance Program changes announced

FHFA, Fannie Mae and Freddie Mac Announce HARP Changes to Reach More Borrowers

Washington, DC – The Federal Housing Finance Agency, with Fannie Mae and Freddie Mac (the Enterprises), today announced a series of changes to the Home Affordable Refinance Program (HARP) in an effort to attract more eligible borrowers who can benefit from refinancing their home mortgage. The program enhancements were developed at FHFA’s direction with input from lenders, mortgage insurers and other industry participants.

“We know that there are many homeowners who are eligible to refinance under HARP and those are the borrowers we want to reach,” said FHFA Acting Director Edward J. DeMarco. “Building on the industry’s experience with HARP over the last two years, we have identified several changes that will make the program accessible to more borrowers with mortgages owned or guaranteed by the Enterprises.

Our goal in pursuing these changes is to create refinancing opportunities for these borrowers, while reducing risk for Fannie Mae and Freddie Mac and bringing a measure of stability to housing markets.” Fannie Mae and Freddie Mac have helped approximately 9 million families refinance into a lower cost or more sustainable mortgage product, approximately 10 percent of those via HARP.

HARP is unique in that it is the only refinance program that enables borrowers who owe more than their home is worth to take advantage of low interest rates and other refinancing benefits. This program will continue to be available to borrowers with loans sold to the Enterprises on or before May 31, 2009 with current loan-t0-value (LTV) ratios above 80 percent.

The new program enhancements address several other key aspects of HARP including:

  1. Eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers;
  2. Removing the current 125 percent LTV ceiling for fixed-rate mortgages backed by Fannie Mae and Freddie Mac;
  3. Waiving certain representations and warranties that lenders commit to in making loans owned or guaranteed by Fannie Mae and Freddie Mac;
  4. Eliminating the need for a new property appraisal where there is a reliable AVM (automated valuation model) estimate provided by the Enterprises; and
  5. Extending the end date for HARP until Dec. 31, 2013 for loans originally sold to the Enterprises on or before May 31, 2009.

An important element of these changes is the encouragement, through elimination of certain risk-based fees, for borrowers to utilize HARP to refinance into shorter-term mortgages. Borrowers who owe more on their house than the house is worth will be able to reduce the balance owed much faster if they take advantage of today’s low interest rates by shortening the term of their mortgage.

The Enterprises plan to issue guidance with operational details about the HARP changes to mortgage lenders and servicers by November 15.  Since industry participation in HARP is not mandatory, implementation schedules will vary as individual lenders, mortgage insurers and other market participants modify their processes.

Borrower Eligibility

In general, borrowers must meet the following criteria:

  1. The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
  2. The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
  3. The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
  4. The current loan-to-value (LTV) ratio must be greater than 80%.
  5. The borrower must be current on the mortgage at the time of the refinance, with no late payment in the past six months and no more than one late payment in the past 12 months.

Homeowners can determine if they have a Fannie Mae or Freddie Mac loan by going to:

FANNIE MAE LOOKUP or calling 800-7FANNIE (8 am to 8 pm ET)

FREDDIE MAC LOOKUP or 800-FREDDIE (8 am to 8 pm ET)

Home lost value? Yes you can refinance

(edited: New rules took effect 10/24/2011 – Click here to view new rules)

HARP – Special Affordable Refinance Program

Has your home LOST VALUE?

THIS IS YOUR BAILOUT!

The funds the Obama Administration has made available for this program come from YOUR tax dollars. Take advantage of this program while it is still available!

Do you have a Fannie Mae or Freddie Mac loan and cannot refinance due to declining property values or a loss of income?

Would you like to reduce the cost of your monthly mortgage payments or move into a stable fixed rate mortgage? We may be able to assist through the Homeowner Affordability and Stability Plan.

A special HARP Affordable Program, which is designed to help up to 9 million American families refinance their loans to a payment that is affordable now, and into the future.

One of the initiatives in this program is aimed at helping responsible homeowners “refinance” their loans to take advantage of historically low interest rates.

Here are some common Questions and Answers about the Refinancing Initiative in the program.

Who is eligible?
You may be eligible, and we can assist you if:

  • You own and currently occupy a one- to four-unit home.
  • Your mortgage is owned or controlled by Fannie Mae or Freddie Mac.
  • You are current on your mortgage payments.
  • The amount you owe on your first mortgage is about the same or slightly less than the current value of your house.
  • Your first mortgage is 105% or less
  • And, you have a stable income sufficient to support the new mortgage payments.

How do I know if my loan is owned or controlled by Fannie Mae or Freddie Mac?
Simply call or email me. I’ll help you determine if your mortgage is backed by Fannie Mae or Freddie Mac.

If I am delinquent on my mortgage, do I still qualify for the Refinance Initiative?
No. But the good news is, you may qualify for the Modification Initiative. Contact the company you currently make payment at to discuss your situation and review your options.

I have both a first and a second mortgage. Do I still qualify to refinance under Making Home Affordable?
Maybe. As long as the amount due on the first mortgage is less than 125% of the value of the property, borrowers with more than one mortgage may be eligible for the Refinance Initiative.

Will refinancing lower my payments?
That depends. If your interest rate is much higher than the current market rate, you would likely see an immediate reduction in your payment amount.

However, lowering your monthly payments isn’t the only criteria to think about. If you have an adjustable mortgage (ARM) or are paying interest only on your mortgage, you may not see your payment go down. BUT… you will be able to avoid future mortgage payment increases and may save a great deal over the life of the loan.

What are the terms of the refinance and what will the interest rate be?
All loans refinanced under the plan will have a 30- or 15- year term with a fixed interest rate. The interest rate will be based on market rates at the time of the refinance. Currently, interest rates are at historical lows, which makes this a good time to examine your refinancing options.

Will refinancing reduce the amount that I owe on my loan?
No. Refinancing will not reduce the principal amount you owe. However, refinancing should save you money by reducing the amount of interest that you repay over the life of the loan.

Can I get cash out to pay other debts?
No. Only transaction costs, such as the cost of an appraisal or title report may be included in the refinanced amount.

How do I apply for the Special HARP Refinance Initiative in MN or WI?
Call 651-70-LOAN1 (651-705-6261) or E-mail us today to discuss your specific situation and to examine your options. If this plan is right for you, we can begin working on your refinance immediately. You can help us help you by filling out out ONLINE APPLICATION. Remember, we lend in MN and WI only.

As part of the discussion, we may need to look at the following information:

  • Recent pay stubs to help determine your gross (before tax) household income.
  • Your most recent income tax return.
  • Information about any second mortgage on your house.
  • Account balances and minimum monthly payments due on all of your credit cards.
  • Account balances and monthly payments on all other debts, such as student loans and car loans.

As always, if you have any questions or would like to discuss how this may specifically impact you, I’d be happy to sit down with you. Just call or E-Mail me to set up an appointment.

If you are a homeowner who is current on your mortgage payments but unable to refinance to a lower interest rate because your home value has decreased, you may be able to refinance.

Do I qualify for an Affordable Refinance? Answer these questions:

  • Is your home your primary residence?
  • Do you have a Fannie Mae or Freddie Mac loan? If you don’t know contact:
  • Are you current on your mortgage payments?
    • “Current” means that you haven’t been more than 30-days late on your mortgage payment in the last 12 months.
  • Do you believe that the amount you owe on your first mortgage is about the same or less than the current value of your house?