President Obama unveiled changes to the Home Affordable Refinance Program in a campaign stop in Nevada yesterday. A city which has been hit hard by the housing crisis.
HARP, which was launched in 2009, was designed to help those who are “underwater” and owe more than their houses are worth.
It has reached less than one-tenth of the 5 million borrowers it was designed to help. Here’s a quick breakdown of what you need to know about the changes.
What was announced? The enhancements will allow some homeowners who are not currently eligible to refinance to do so under HARP. The changes cut fees for borrowers who want to refinance into short-term mortgages and some other borrowers. They also eliminate a cap that prevented “underwater” borrowers who owe more than 125 percent of what their property is worth from accessing the program.
Am I eligible? To be eligible, you must have a mortgage owned or guaranteed by Fannie Mae or Freddie Mac, sold to those agencies on or before May 31, 2009. The current loan-to-value ratio on the mortgage must be greater than 80 percent. Having a mortgage that was previously refinanced under the program disqualifies you from the program. Borrowers cannot not have missed any mortgage payments in the past six months and cannot have had more than one missed payment in the past 12 months.
How do I take advantage of HARP?According to the Federal Housing Finance Agency, the first step borrowers should take is to see whether their mortgages are owned by Fannie Mae or Freddie Mac. If so, borrowers should contact lenders that offer HARP refinances.
When do the changes go into effect?The FHFA is expected to publish final changes in November. According to a fact sheet on the program, the timing will vary by lender.
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