HARP: Refinance Even If You’re Mortgage Is Upsidedown

Home Affordable Refinance Program (HARP), the newest program sponsored by the government, which is informally called “short refinance.”  This program allow homeowners with no equity and those who owe more than their home is worth, to refinance into today’s record-low interest rates.

 So, what are the requirements?

1.  Fannie/ Freddy backed loans.  The mortgage must be guaranteed by government-sponsored Fannie Mae or Freddie Mac. You can check yours online by clicking the link:

Fannie Mae – http://www.FannieMae.com/loanlookup – or call 800-7FANNIE

Freddy Mac –  http://ww3.FreddieMac.com/corporate/ – or call 800-FREDDIE

Other links:

Builder Magazine has an article about qualifications: http://www.builderonline.com/builder-pulse/who-harp-2-0-will-help.aspx?cid=BP:112111:JUMP

Columns in the San Francisco Chronicle expand and some cases contradicts the BM article about HARP.

HARP 2.0 Congress reinstates higher FHA mortgage limit

2.  Be current.  You have to be up-to-date on your payment.  Not even 1 delinquent payment is allowed.

3.  Problem with credit.  Not an issue at all.

4.  Underwater:  Yes since this program is geared toward homeowners that are upsidedown on their loan.  

So, when is it coming and what are the limits on principal reduction?  Answer:  Good news/bad news LTV caps will be removed for all Fixed rate mortgages with terms up to 30 years. Unfortunately, lenders and borrowers won’t be able to utilize this relief until DU (automatic loan approval from Fannie Mae) is updated in March 2012.

Bottom line, this seems like the best program so far to find a bottom in real estate, and to add liquidity to the economy. Every family who accomplishes this refinance, will have more cash to spend which will contribute to economic expansion. Lastly, this program should also reduce distressed sales, which will help the recovery of the housing market.

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