HARP Program for Underwater Borrowers Extended

The HARP program (Home Affordable Refinance Program) which enables underwater mortgage holders that are current on their mortgages to refinance at today’s low interest rates has been extended through 2015. The program had been scheduled to expire the end of 2013.

More than 2 million mortgage holders with little or no equity have used the HARP to date and obviously lenders and home owners alike welcome the news of an extension.

The program is available for those with loans backed or guaranteed by Fannie Mae or Freddie Mac which back approximately 2/3rds of all mortgages within the United States.

Both Fannie Mea and Freddie Mac are already responsible for losses if the loan that the entity backs default and the servicers risks actually decrease when borrowers that have paid on underwater mortgages can lower their current payment.

Certain criterion does exist.  The loans must have been sold to Fannie or Freddie no later than May 31, ’09. Those who have already used HARP to refinance a home cannot do so again.  To qualify, the mortgage holder must owe more than 80 percent of the current homes value.  No payments can be missed for the last 6 months.

Go to the Fannie Mae or Freddie Mac website to find out if you are eligible for HARP:

Fannie Mae:  www.knowyouroptions.com/loanlookup

Freddie Mac:  www.freddiemac.com/corporate

The latest version of HARP has seen great success due to certain changes that were made.  Appraisal requirements were nixed, lenders are provided better legal protections and the size limit of 125% of the home’s value was lifted.  The changes opened doors for additional HARP participants.

Nearly 3 milling underwater borrowers are still eligible for HARP.  The average savings from a HARP refinance is around $200 monthly with an average interest rate reduction of 1.75%.

HARP refinance

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