HARP Brings New Hope for Refinancing

There’s new help for Costa Mesa real estate owners who have been upside down on their mortgages.

Good news for those of you homeowners who for one reason or another have found yourself in the position that you would like to take advantage of historically low interest rates, but have been told “no” by a lender who needs your property to have at least 20% equity to perform a refinance.

President Obama has pushed through the federal system a loosening of restrictions for those who wish to refinance their upside down properties. HARP Brings New Hope for Refinancing – Borrowers who are current on their home loans may be able to refinance for lower interest rates, even if they are seriously upside down. The Federal Housing Finance Agency (FHFA) announced today that it will broaden the scope of the Home Affordable Refinance Program (HARP) by removing the current 125 percent loan-to-value cap for fixed-rate mortgages backed by Fannie Mae and Freddie Mac.

 

Other program enhancements include, among other things, reducing certain fees, eliminating the need for a new property appraisal on your home if the FHFA has a reliable automated valuation model (AVM) estimate, and extending HARP until the end of 2013. These new federal guidelines for the HARP changes should be released to mortgage lenders and servicers by November 15, not soon enough for many of you that I have talked with in the past.

The basic eligibility requirements for an enhanced HARP loan on a property are as follows:

• Existing mortgage loan on the home must be owned or guaranteed by Fannie Mae or Freddie Mac. To check whether a borrower has a Fannie Mae or Freddie Mac loan, click here.
• Existing mortgage loan must have been sold to Fannie Mae or Freddie Mac before June 1, 2009.
• Existing mortgage loan cannot have been refinanced under HARP previously (except for Fannie Mae loans refinanced between March and May 2009).
• Current loan-to-value (LTV) ratio must be more than 80%.
• Existing mortgage loan must be current, with no late payments in the past six months, and no more than one late payment in the past 12 months.

So what do all of these bullet points mean?

Hopefully if you tried a loan modification and were told to miss a payment by your lender, that’s the only payment you missed. You would still be qualified to get involved with the expanded HARP program if this is the case for your Costa Mesa real estate property.

And for those of you have been diligent about paying on time and been waiting on the sidelines for something like this to come to tuition, the time is now! Interest rates have been hovering around 4% for the better part of two months now, and for those of you with mortgages of more than $400,000 the lower interest rates can make a significant difference in your monthly payments.

Need a good lender for your refinance? I would be happy to give you three good recommendations, all to good, honest lenders who can help you with your questions. Call Colin Delaney at (714) 743-9882 or e-mail me.