December 20, 2011
In an effort to help homeowners underwater with their mortgages, the Obama administration introduced HARP, Home Affordable Refinance Program, in March 2009. The program is essentially a bust as it failed to reach those who needed it the most. There were problems with mortgages that had a second mortgage holder, complications with mortgage insurance, lenders preferred “regular” refinancing, and perhaps most significantly, our economy didn’t pick up.
Two years later, the pool of struggling homeowners who are not able to quality for refinancing has deepened, and new efforts are underway to make it easier to save them from drowning. The revised HARP Phase II is anticipated to roll out on April 1, 2012, and while final details haven’t been publicized yet, we do know of some key enhancements:
- The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
- The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
- 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.
- The current loan-to-value (LTV) ratio must be greater than 80%.
- 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.
- The new change also cuts fees for those who do shorter-term mortgages.
So how do you know if you’re eligible for HARP II? The first step is to know who owns your mortgage. If it’s Freddie Mac or Fannie Mae, call us to discuss how we can help. It’s important to note that not all lenders offer the HARP program (another reason why the first phase failed). Delta Home Loans is one of the few with the life line to keep you in your home, and we are here to help.