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New HARP refinance announced

By Polyana da Costa · Bankrate.com
Monday, October 24, 2011
Posted: 2 pm ET

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.

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16 Comments
Susan
November 09, 2011 at 4:56 pm

Be aware...the PMI has increased on Fannie & Freddie loans so refinancing may not lower your payment. Your principle and interest may be lower but with the higher PMI your payment could be right where you are currently at

Julie
November 03, 2011 at 10:14 pm

Voluntary means that nobody can make them lower your interest rate or payments, plus why would they since they are making money off of us by not participating. Not to mention the stupid fees involved in closing costs.

Mike
October 31, 2011 at 4:46 pm

I just called and went through an hour of questioning and 3 consultants to find that the 30 yr loan rate is 5.5% (which is close to my current rate). The problem was my house is worth less than the current mortgage (119%). I thought the whole purpose of the program was to reduce rates for people in exactly this position? FAIL

PG
October 31, 2011 at 1:33 pm

Why did they not extend the date beyond May 31, 2009?
I wish they would have also allowed investment properties.

kat
October 29, 2011 at 11:15 am

Bank participation is "voluntary", which means IT'S NOT GOING TO WORK

jorge
October 26, 2011 at 3:52 pm

another BS program that our government shells out. if they truly wanted to help folks, why didn't they come out with this program from the begining? or better yet, why didn't the bailout "us" taxpayers instead of Bank of America, Wells Fargo, CitiBank, etc.?

Angela
October 26, 2011 at 2:29 pm

I started the Harp refinance in September it is now into 60 days and still my paperwork is with Fannie Mae. Where does this leave me with the NEW changes? Will my paperwork be revisited and recalculated to the new guidelines even if they have not come out yet? My loan officer does not know yet and I want to know before I finalize anything. What are my options?

Terry
October 26, 2011 at 1:06 pm

This could be a big help if PMI could be left out.

sean
October 26, 2011 at 12:22 pm

This still doesn't help people like me who didn't get choose who bought their mortgage. Evidently, my loan isn't backed by Fannie & Freddie so i'm on the outside of this HARP plan.

Ken
October 25, 2011 at 7:15 pm

this another bust?