Following its slow start in 2009, the Obama administration's Home Affordable Refinance Program, HARP and HARP 2.0, has turned the corner and is now helping Wisconsin homeowners and homeowners throughout the US refinance their upside-down mortgages.
Since its inception, the HARP - HARP 2.0 program has evolved by loosening the restrictions and allowing more and more homeowners the opportunity to take advantage of refinancing their higher interest home loans.
Scott Reckard from the LA Times recently reported "Nearly 1.1 million homeowners with little or no equity were able to refinance last year under HARP, which assists borrowers who are current on their monthly payments. That's nearly as many as in the three previous years combined, and the latest figures show that early this year, the pace of these refis abated only slightly"
With the renewed interest we are seeing, it is a good time to go over the details of the program and review some of the frequently asked questions.
The acronym HARP refers to the Home Affordable Refinance Program. HARP is a financial aid program announced by the Obama Administration in 2009 to help millions of homeowners who are either near-underwater or underwater (means you have zero - or even negative - equity in your home) to refinance into a fixed loan with lower monthly payments.
The modified HARP program, AKA - HARP 2.0, is also referred to as The Making Home Affordable Program, the DU Refi Plus Program, and/or the Obama Refi Program. The program is specifically targeted towards Wisconsin and US homeowners whos loan-to-value ratio is less than 125 percent.
However, guideline changes made to the HARP 2.0 program lifted the loan-to-value restrictions enabling more and more Wisconsin and US borrowers the ability to participate and apply to this special refinance program.
The elimination of the 125% loan-to-value for fixed rate Freddie Mac or Fannie Mae mortgages and the exclusion of appraisals for new properties where there is already a reliable Automated Valuation Model or AVM are two such major changes that will make more people eligible.
Risk-based fees that discouraged borrowers from taking short-term mortgages have been eliminated and this will help those with loans valued at more than the value of their house.
This opened the door for reduced interest rates, resulting in lower monthly installment payments, whereby creating equity faster.
The goal of the newly modified HARP 2.0 Program is to help stabilize the real estate market and encourage more people to buy homes on loans.
HARP 2.0 gives Wisconsin and US homeowners the ability to refinance at today's low mortgage rates without private mortgage insurance, exorbitant closing costs and fees, and in most cases without an appraisal. If you have been turned down before for this program, you will certainly want to re-apply for HARP 2.0.
In order to qualify for HARP refinance assistance, the two basic eligibility requirements are:
1. Your loan must be backed by Freddie Mac or Fannie Mae - LOOK IT UP HERE
2. Freddie or Fannie should have bought your mortgage prior to June 1st, 2009.
Here are answers to a few frequently asked questions about HARP 2.0:
What if I can’t find my records using the Fannie Mae or Freddie Mac lookup tools? This may show that you are ineligible for HARP assistance. However, keep in mind that these lookup tools are not always accurate as the address would have to be exactly the same as was recorded with Fannie or Freddie. Even if you find that you are ineligible, the possibility of getting regular refinance at lower rates still exists and you need to check your options.
If I'm behind on my mortgage can I still be Eligible for HARP? No. Your mortgage must be absolutely current to make you eligible for refinancing your Wisconsin mortgage through HARP.
Do I have to use my current lender with HARP 2.0? If you are applying for a DU Refi Plus loan (HARP 2.0), you may choose any lender you wish or select the existing servicer to originate it.
How do I find out if my lender is participating? Any mortgage originator can issue a HARP loan, so it's not necessary for borrowers to go back to their original lender. Keep in mind, simply because any lender has the ability to participate, does not mean they all do. Call around to find lenders who are offering refinancing under HARP and ones that have experience and are knowledgable about the program.
What are the basic requirements for HARP-eligibility? First, your home loan must be paid on-time for the prior 6 months, and at least 11 of the most recent 12 months. Secondly, Freddie or Fannie should have bought your mortgage prior to June 1st, 2009. Thirdly, you have never used a HARP mortgage refinance before. You are allowed only one HARP refinance per mortgage.
How is HARP 2.0 different than HARP 1.0? The enhancement providing the most benefit to the homeowner between the first and second versions of HARP; HARP 2.0 allows borrowers with mortgage insurance to qualify for a refinance. This is a HUGE benefit as this change opens up the program to an entirely new pool of borrowers. Borrowers having mortgage insurance did not qualify under the HARP 1.0 program.
When does the HARP 2.0 Program end? You must close your HARP 2.0 refinance by Dec. 31st, 2015.
More detail can be found by visiting my website. If you have questions, or simply want to discuss your options, please feel free to contact my office. We are here help.
I hope you have found this information helpful and wish you all best.