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An improved refinance program that is expected to allow millions of underwater borrowers to refinance their mortgages was just announced.
Borrowers will be able to refinance their mortgages owned by Fannie Mae and Freddie Mac under the Home Affordable Refinance Program, or HARP, even if they owe more than what their house is worth. The previous version of HARP allowed borrowers to refinance up 125 percent of the home's appraised value. Millions of borrowers couldn't benefit from HARP because of that cap. To states that were hardest hit by foreclosures, such as Florida and some areas in California, the previous version of HARP was useless.
The Federal Housing Finance Agency, Fannie and Freddie announced it will remove the cap and several other barriers that have prevented borrowers from taking advantage of the program.
HARP also was extended through Dec. 31, 2013. The program applies to loans that were sold to Fannie or Freddie on or before May 31, 2009.
To be eligible for the program, borrowers must be current on the mortgage at the time of the refinance, with no late payments in the past six months and no more than one late payment in the past 12 months.
When will the revamped HARP be available to borrowers? Fannie and Freddie will send instructions to lenders by Nov. 15. Some lenders may start offering refinances under the improved plan by Dec. 1, but the timing will vary, according to the FHFA.
Check back later for more details.
@ Ken: Please call Cindy Salem at Wells Fargo 718-310-4310 and find out if you can get your loan refinance under HARP.
Mortgages with lender PMI do not qualify under the new HARP guidelines but someones vacation home does, REAL NICE!!
I am active duty military with a mortgage secured by Fannie Mae and I am underwater on it by 114%. I contacted my mortgage lender, Navy Federal Credit Union (NFCU) (my original lender), about refinancing my home with the HARP program since they advertise it on their website. I was informed that I do qualify for the HARP program and they offered me 5.875% interest rate while my current interest rate is 6.25%. That would only save me approximately $50 a month. Also, NFCU informed me that the HARP program they have is not the government HARP program (even though it is the exact same name) and that was the best interest rate that they could offer me even though I have excellent credit (credit score 740's). So I called around to six (6) of the main local banks and all of them informed me that they do not participate in the HARP program. If someone can help me with this or suggest another lender, please let me know. Thank you.
Beware - CitiMortgage denied our HARP application because my state was declared a disaster zone. Weak excuse.