In 2009, the
Home Affordable Refinance Program (HARP) was introduced to help those
homeowners who remained current with their mortgage payments but were unable to
refinance due to the falling value of their homes. For many homeowners, the value of their home
was less than their mortgage balance and were unable to refinance. For others, they would be required to have
mortgage insurance, or the amount of mortgage insurance required was greater,
because they now had less equity in the home.
The addition or increase in their mortgage insurance negated most, if
not all, of the savings they would receive from refinancing.
In the
beginning, HARP only helped a limited number of homeowners due to some of the
restrictions in the program. But, after
some changes (HARP 2.0) over 3 million homeowners were able to refinance their mortgages
and take advantage of the record-low mortgage rates.
Under HARP,
if your mortgage was bought by Fannie Mae or Freddie Mac prior to July 1, 2009
you would be able to refinance your mortgage, provided your were current for
the past 6 months and only one late payments in the last 23 months, even if you
lost most or all of your equity. And,
your mortgage insurance requirements would be the same for the new mortgage as
it was for the mortgage being refinanced.
So, if you did not have mortgage insurance, and you no longer had 20%
equity in your property, you could still refinance without needing mortgage
insurance. And, if you had mortgage
insurance on the mortgage being refinanced, you would have the same mortgage
insurance coverage and payments on the new mortgage, regardless of equity
position.
Why hasn’t
everyone taken advantage of the HARP Program?
First, many
people are still unaware that the program exists. Despite a major marketing campaign by the
federal government, and countless mortgage lenders, I still talk to a lot of
people who have never heard of the HARP Program.
Second,
there are many people who tried to refinance under the original HARP guidelines
(HARP 1.0) and were turned down. They do
not know that the revisions that came around with HARP 2.0 made it a lot easier
for the mortgage lenders to approve more borrowers. If you know someone who tried to refinance
under HARP and were rejected, have them contact me and I can help them
refinance.
Third,
according to Mel Watt, Director of the Federal Housing Finance Agency (FHFA),
many homeowners got burned and do not trust their lenders. Many people feel the HARP Program is a
scam. This is why Mr. Watt and the FHFA
are reaching out to people to let them know they can benefit from the HARP
Program. "We know that there
are hundreds of thousands of borrowers who can still benefit from
Home Affordable Refinance Program and are essentially leaving money on the
table by not taking advantage of the program," said Watt.
The FHFA has
also created an interactive map to show the approximate number of people in a
given county, city and even zip code that can benefit from HARP.
If you, or
anyone you know, has a mortgage that was originated on or before June 30, 2009
please have them contact me to see how much money they can save. And, as always, if you have any questions
regarding real estate or mortgage, please contact me at BarkerLoans@gmail.com.
