The Making Home Affordable Program is part of the current government administration's strategy to get the economy and the housing market back on track. The Making Home Affordable Program offers two different potential solutions for borrowers: (1) refinancing mortgage loans, through the Home Affordable Refinance Program (HARP), and (2) modifying mortgage loans, through the Home Affordable Modification Program (HAMP).
You may be eligible for a refinance under HARP if:
- The loan on your property is owned or guaranteed by Fannie Mae or Freddie Mac
- At the time you apply, you are current on your mortgage payments ("current" generally means that you have not been more than 30 days late on your mortgage payment in the last 12 months, or, if you have had the loan for less than 12 months, you have never missed a payment);
- The amount you owe on your first lien mortgage does not exceed 125 percent of the current market value of your property;
- You have a reasonable ability to pay the new mortgage payments; and
- The refinance improves the long term affordability or stability of your loan.
If you are current on your mortgage you will still be able to refinance under the Home Affordable Refinance Program (HARP).
Eligible borrowers who are current on their mortgages but have been unable to take advantage of today's lower interest rates because their homes have decreased in value, may now have the opportunity to refinance. Through a refinance under HARP, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they own or that they guaranteed in mortgage backed securities.
If you owe more than your property is worth qualifying for refinance under HARP is as follows.
Eligible loans will include those where the first lien mortgage does not exceed 125 percent of the current market value of the property. For example, if your property is worth $300,000 but you owe $350,000 or less on your first lien mortgage you may qualify. The current market value of your property will be determined after you apply to refinance.
If you refinance under HARP it will not reduce the amount you owe on the loan.
The objective of a refinance under HARP is to help borrowers get into more affordable or stable loans. Refinancing will not reduce the principal amount you owe to the first lien mortgage holder or any other debt you owe. However, refinancing should save you money by reducing the amount of interest that you pay over the life of the loan.
You decide you want to apply for a refinance under HARP.
You should call your mortgage lender and ask for a Home Affordable Refinance application. The number is on your monthly mortgage bill or coupon book. Please be patient. Lenders and servicers are implementing the program now and it may take time before they are ready to process all applications. In the meantime, it will help your lender and speed up the application process if you gather some information and documents before you call.
Alternately, you may apply through a lender approved to do business with Fannie Mae or Freddie Mac. Nearly all major banks and mortgage brokers have this approval.
You will need the following documentation.
It will help your lender if you gather some information and documents before you call. Generally, you will need:
- Information about the monthly gross (before tax) income of all the borrowers on your loan, including recent pay stubs if you receive them, or documentation of income you receive from other sources.
- Your most recent income tax return.
- Information about any junior lien mortgage on the house.
- Account balances and minimum monthly payments due on all of your credit cards.
- Account balances and monthly payments on all your other debts such as student loans and car loans.
The HARP program expires on June 10, 2010. Your refinance under Home Affordable Program must have a mortgage note date on or before that date.
For more information please visit www.SCVDistressedPropertyHelp.com
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