HARP 2 Refinance For Homeowners With Underwater Mortgages


This BLOG On HARP 2 Refinance For Homeowners With Underwater Mortgages Was Updated On November 18th, 2018

Which means refinancing HARP 2 for homeowners with underwater mortgages

The 2008 Real Estate and Mortgage Meltdown has devastated the real estate market. It left millions of homeowners with mortgage balances higher than the value of their homes.

  • This meltdown of real estate values has devastated millions of American homeowners who really relied on the equity in their homes
  • Many homeowners counted on selling their homes with equity
  • Many considered downsizing to a less expensive home and relied on the equity as part of their retirement

Homeowners who planned on selling their homes and relocating to retirement communities like Florida, Texas, Michigan, Mississippi, Indiana, Kentucky, New Jersey, Pennsylvania, Colorado, Georgia, Illinois, Arizona, and California had to postpone their retirement and plan on working until their home values recovered.

HARP 2 Refinance Was Solution For Upside Down Mortgages

Unfortunately, millions of people have homes that have plummeted in value due to the real estate and credit market crash of 2008. They have lost all of their equity in their homes.

Worse yet, these homeowners were left with two choices:

  • Be stuck in their homes because their mortgage is higher than the value of their homes
  • Others could not afford their mortgage payments
  • This was due to having teaser rate mortgages and ended up abandoning their homes
  • Others are still making their monthly mortgage payments preying that someday they will break even
  • A lucky few had home loan modifications done with their current lenders
  • They restructured their current home loans

What Is The HARP 2 Refinance Program

The HARP 2 Refinance program was a relief to millions of homeowners who had Conventional mortgages:

  • To qualify, homeowners needed to have conventional mortgage loans that have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009
  • The homeowners had mortgages with high-interest rates where the balances of their mortgage loans exceeded the value of their homes
  • Homeowners who owned homes that have fallen below the mortgage balance qualified for the HARP 2 Refinance Mortgage Program
  • These homeowners had negative equity in their homes
  • Had to come up with money if they were to sell their homes

Benefits Of HARP 2 Refinance Program

What are the benefits of the HARP 2 refinancing program?

HARP 2 is a refinance option for homeowners that had mortgages “underwater.” By underwater mortgages, it meant that the homeowner owed more on their home mortgage than their home was worth.

In order to be eligible for the HARP 2 refinance program, you must meet certain criteria:

  • First, you must not have refinanced through the original HARP program.
  • You need to be current on monthly mortgage payments with no late payments over 30 days due in a minimum of 6 months, and no more than one late payment in the previous 12 months.
  • Your mortgage must be backed by Fannie Mae or Freddie Mac and must have been bought by either Fannie or Freddie before May 31st, 2009.  
  • The purpose of HARP is to allow homeowners who owe a mortgage that is more than the value of their home a more affordable and stable mortgage.
  • Remember that your current mortgage has to be a Fannie Mae or Freddie Mac Loan and the loan must have been sold to FANNIE MAE or FREDDIE MAC no later than May 31, 2009

Many potential clients of mine did not qualify for the HARP Refinance because their loan was either not a Fannie Mae or Freddie Mac Loan or they missed the target deadline date of May 31, 2009.


Rumor has it that the new HARP 3.0 is just around the corner.  We are predicting that HARP 3.0 will be in effect in the first quarter of 2013.  Once HARP 3.0 is in effect, all of the homeowners who have their mortgages underwater can seek relief by refinancing.  I personally know of homeowners who have mortgage rates as high as 8% who are stuck on a home that the value dropped from $200,000 to $62,000. Her mortgage amount is $144,000.00 and she did not qualify for the HARP 2 Refinance Program because she did not have a Fannie Mae or Freddie Mac Loan.

We will keep you posted with the first news we get on the HARP 3.0 REFINANCE PROGRAM.  If you need a pre-approval fast, click on APPLY NOW FOR PRE-APPROVAL


This blog was updated on November 18th, 2018. Many changes happened during the housing and credit market.

  • Most homes that were underwater has recovered from the 2008 Real Estate and Credit Collapse
  • The real estate market is hot nationwide
  • Florida and California were two of the hardest hit states due to the Great Recession of 2008
  • However, almost every county in both states have recouped the drop in real estate values and homeowners have seen the light at the end of the tunnel
  • Real estate in many parts of the country are increasing double digits and there are more home buyers than an inventory of homes
  • Credit requirements have lightened up
  • Gustan Cho Associates is one of the few national mortgage lenders with no lender overlays
  • GCA Mortgage Group has a national reputation of closing loans in 21 days or less

HARP 2 Refinance Mortgage will expire on December 31st, 2018. However, Gustan Cho Associates has many other alternative financing programs to help homeowners save money. Contact us for details.

Qualifying For Home Loans With Direct Lender With No Overlays

How to qualify for a home loan with a direct lender without overlays

Here are the basic mortgage lending requirements at The Gustan Cho Team at Loan Cabin Inc.

  • No Overlays on FHA, VA, USDA, and Conventional Loans
  • 21 days closings on most mortgages
  • Minimum credit scores on FHA, USDA,  and VA Loans is 580 FICO
  • Conventional Loans require a 620 credit score which includes second homes and investment homes
  • 95% LTV Jumbo Mortgages
  • 100% Loan To Value Cash Out Refinance on VA Loans
  • No debt to income ratio requirements and no overlays on VA Loans
  • The Team at Gustan Cho Associates is available 7 days a week including evenings, weekends, and holidays
  • NON-QM Loans for home buyers one day out of bankruptcy and foreclosure
  • Non-Warrantable and Condotel Financing
  • Advanced Buyer Fast Track TBD Mortgage Loan Program
  • FHA 203k Rehab Loans
  • Reverse Mortgages
  • Bridge Loans

Gustan Cho Associates has no overlays on government and conventional loans. We also offer non-qm loans and alternative financing programs. Our 95% LTV NON-QM Jumbo Loans only require 5% down payment with no private mortgage insurance required. Our bank statement loan program for self-employed borrowers does not require any tax returns. We offer non-qm loans with credit scores down to 500 FICO. Please contact us at 262-716-8151 or text us for a faster response. Or email inquiries at gcho@gustancho.com.

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