HARP 2011
Underwater homeowners have longer to refi

"The neatest thing about the program is that I have people who are 125 percent loan-to-value, but have a second mortgage. They may be 125-over or 175 or 150, and you can still do the loan," Chivas says.

Borrowers whose LTV ratio is higher than 105 percent, though still within the 125 percent limit, likely will be subject to higher costs to refinance.

Not a failure

HARP hasn't lived up to its advance billing, nor has it been a flop. In 2010, Fannie Mae and Freddie Mac purchased or guaranteed about 621,800 HARP refinance loans, up from about 190,180 such loans in the prior year when the program was launched, according to the Federal Housing Finance Agency, or FHFA. Wells Fargo alone has closed more than 215,000 refinance loans with LTV ratios greater than 80 percent since HARP was started, Adams says.

"The claims of this particular program being a disaster are, I believe, completely inaccurate," Chivas says.

That said, the number of homeowners who can benefit may be shrinking due to higher mortgage interest rates, he says. Upward adjustments in rates make refinancing less attractive, even for homeowners who could reduce their total interest expense over the term of the loan.

Homeowners who could benefit but haven't yet acted may be angry or numb or despondent over the drop in the home's value, Chivas says. Some are reluctant to spend $2,000 upfront, even to save $30,000 or more over the loan term, because they don't feel secure about their job or financial situation.

Borrowers should note that the name "HARP" originated at the U.S. Treasury, but isn't used by most lenders. Instead, Fannie Mae's programs are part of its Refi Plus and DU, or Desktop Underwriter, Refi Plus while Freddie Mac's program is called Relief Refinance Mortgage.

Borrowers seeking assistance are advised to shop around, regardless of whether their loan is in Fannie Mae land or Freddie Mac world. Asking for "the Treasury program that allows a higher LTV" might help.

Unless HARP is extended again, the new end date will be June 30, 2012.

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