refinance

HARP roadblocks

 

 

(Begin VIDEO with Kristin Arnold, Bankrate.com anchor introducing the video topic)

You have good credit, you're up-to-date on your mortgage payments, but you're home is underwater. If this scenario sounds familiar, the Home Affordable Refinance Program or HARP was designed just for you. However, a hitch in the HARP program is catching numerous homeowners by surprise and causing disappointment.

The Home Affordable Refinance Program was designed to allow homeowners to refinance into a new affordable, more stable mortgage despite the decline in home values. But some hopeful HARPers are finding exclusions in the program ... but only after being denied.

Such is the case for Massachusetts homeowner, Jessica Ullrich. Jessica applied for a HARP refinance in October of 2010 only to be denied two weeks later.

(Cut to Jessica Ullrich speaking)

SOT: Jessica Ullrich, HARP hopeful homeowner

"Ya know, we met all the criteria for the program as far as we could tell. We have great credit; we've never missed a mortgage payment at all. We've been actually been paying ahead on our principal, so you think we would be the ideal candidates for the program."

What Jessica didn't know and what she's still trying desperately to verify after 7 months of trying to get a HARP refinance is whether or not her lender had placed insurance on her mortgage when she took out the loan in 2006.

Lender paid mortgage insurance, also referred to as LPMI, is behind the scenes insurance paid for by the lender ... and within the guidelines of HARP, you cannot refinance if you have LPMI.

Some consumers don't know they have LPMI until they try for a HARP refinance, only to run into the same roadblocks as Jessica Ullrich.

Finding out whether you have lender-paid insurance isn't always as simple as it should be.

In Jessica's case it took her having to contact and file a complaint with the Office of the Comptroller of the Currency against her mortgage lender to verify whether or not she has LPMI on her loan.

Some words of advice from those who have gone through the HARP process is to be diligent, keep a good paper trail and don't get frustrated and give up.

In the meantime, all Jessica can do is document and wait for final word on her LPMI status. Despite the months long frustrations of trying to refinance through the HARP program…she's hopeful it will be worth the wait.

(Cut to Jessica Ullrich speaking)

"Our interest rate right now is 6.625% and we when we spoke to our original lender early in the process we were quoted a rate of like 5.5%, so it would be substantial savings every month for us ... and over the longer term that adds up. So, I think it would we worth it for us."

TAG: To look deeper into the HARP program, visit our HARP special feature at Bankrate.com.

(END VIDEO CLIP)

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