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Is the New Home Affordable Refinance Program Hype or Help?

peter-wright-harp-There are approximately 11-Million homeowners that are underwater, which represents about 23% of all outstanding mortgages. So, here comes another program to help the America Homeowner! Is it hype…or will it help?

Well, the new HARP program (Home Affordable Refinance Program) was released in

November 2011 however the program will not be implemented by Fannie Mae or Freddie Mac until Mid march 2012. So we are less than 20 days away from a program that may actually work and help these equity challenged homeowners! The guidelines seem to resolve some of the major obstacles that the original HARP program (released in 2009) failed to address such as equity…or should I say lack of equity!

The original program capped the loan-to-value at 125% but most participating lenders or banks added another layer of underwriting that actually restricted the LTV to 105% so very few people qualified or where eligible. Another big change is the PMI companies are co-operating with this new program and may transfer the old coverage and premiums over to thenew loan HARP loan. This will really help a lot borrower’s take advantage of today’s historic interest rate environment.

Guidelines for the program are still being put together, however a “snap shot” of the some eligibility requirements are as follows:

An appraisal will be required for most loans although the actual value will have no bearing on whether the loan is approved or not. The loan should have been originated and sold to either Fannie Mae or Freddie Mac prior to May 2009 and the loan should be in good standing with a good pay history. Income and work stability are still going to be factors and having additional assets will defiantly help. In addition, if your current mortgage does not have PMI (private mortgage insurance) now, you won’t have it on the new HARP 2.0 program either, regardless of your equity position.

For more information on this program please click here.

 

 

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