The Home Affordable Refinance Program (HARP) is now in its second version, 2.0. The question is who may this benefit and why was a second version rolled out?
Let’s answer the latter part of the question first. The original HARP didn’t do much to help folks in states such asArizona,California,Nevada, andFloridawhere home values were hit the hardest. Under the old program, lenders were limited to loaning up to 125% of the value of the property (LTV). This guideline immediately prevented millions from potentially qualifying.
So what’s different in HARP 2.0? The major difference is the removal of the loan-to-value restriction. In other words a homeowner could be leveraged to 200% or more against their home and still qualify; there simply is no loan-to-value limits in the 2.0 version.
What does this program do? In essence, this program is a rate and term refinance program designed to let homeowners take advantage of today’s lower interest rates. This applies to people with fixed rate mortgages simply looking to lower their rate, those who have adjustable rate mortgages (ARMs), those with interest only loans, or those who simply want to move to a shorter term.
The program is available only for homeowners whose current mortgage is owned by either Fannie Mae or Freddie Mac. Additionally, the mortgage had to have been taken out on or before May 31, 2009.
It’s important to note that this isn’t a program to help those who are way behind on mortgage payments. The program requires that there have been no late mortgage payments (late payments meaning 30+ days behind) within the last 6 months and a maximum of one late mortgage payment in the last 12 months. Anyone who doesn’t meet these requirements should still speak to his or her mortgage servicer and ask what assistance may be available.
While technically released now, HARP 2.0 won’t be offered widely until March, 2012. At this time, the Automated Underwriting System (AUS) is being updated to accommodate the program changes. Since most lenders lean heavily on these computer systems to assist with underwriting, most are waiting until the new update has been released.
If you believe that you or someone you know may benefit from this program, the best thing to do is to consult a lending professional.
To determine whether Fannie Mae or Freddie Mac owns your loan, you can go to the following web sites:
Fannie Mae: https://www.fanniemae.com/loanlookup/
Freddie Mac: https://ww3.freddiemac.com/corporate/