Erik Molnar has a lot in common with millions of other homeowners across America. He's gainfully employed, has great credit and he's never missed a mortgage payment. But his home is under water.
Many of the homeowners in the hardest hit real estate markets like Florida, Nevada and California have long since walked away from their underwater homes. But some, like Erik, have held to their commitment waiting out relief.
Take SOT: Erik Molnar, Florida homeowner
"I felt that I could afford my house ... um I did everything right. I mean, I bought the house at peak market, but I didn't buy it for peak value. I got a 30-year mortgage, fixed-rate ... I did everything right that I could possibly do. Um, the market crashed but I refused to walk away just because everybody else was."
Continue VO: So, when Erik heard about the government's second attempt to help "responsible" homeowners reduce the cost of their monthly mortgage payments through the Home Affordable Refinance Program, known as HARP 2.0 – he jumped at the chance.
Take SOT: "After doing some research online I found out that there's a HARP hotline. I called the hotline and spoke to one of their counselors. They basically walked me through what it was going to be like to go through the mortgage with the bank. The next step for me was to actually call the bank and ... uh that was actually a very easy process. I only spent 15 minutes on the phone with the bank and ... we pretty much wrapped it up."
Stand-up: The whole process took Erik four weeks and his mortgage rate went from 5.87% to 4% - saving him just over $200 dollars a month. While the process was cut-and-dry for Erik – not everyone is experiencing the same success.
Take SOT: Holden Lewis, Assistant Managing Editor, Bankrate.com
"Borrowers are finding several main problems. Either their current lender just doesn't do HARP refis or the borrower doesn't qualify because they are too far underwater or their credit score it too low or they have kind of a weird problem like they have lender paid private mortgage insurance. And the thing to do is if your current lender won't do a refi because of that, just keep looking because chances are that you will be able to find a lender that will do a HARP refi."
Stand-up: While some homeowners have run into roadblocks – over 180,000 loans were refinanced through HARP 2.0 in the first quarter of this year. (*Source: Federal Housing Agency)
To qualify for HARP 2.0
- Your mortgage must have been sold to Fannie Mae or Freddie Mac before June 1, 2009.
- You must be current on the mortgage and have no late payments in the last six months. A late payment is defined as one that's more than 30 days overdue.
- You must not have more than one late payment in the past 12 months.
- This must be your first refinance through HARP. If you have refinanced under an earlier version of HARP, then you do not qualify.
TAG: To learn more on HARP 2.0 – visit the refinance section at Bankrate.com. I'm Kristin Arnold.