HARP Program For Homeowners With Underwater Mortgages

This ARTICLE On HARP Program For Homeowners With Underwater Mortgages Was PUBLISHED On May 8th, 2018

What Is The HARP Program?

Millions of homeowners fell victim to the real estate and credit meltdown of 2008 and have seen their hard-earned equity in their homes evaporate. This left many in homes where the mortgage balance was higher than the value of their homes.

Million of homeowners bailed on their homes
Others kept their homes even though the value of their homes were less than what they owed in their homes
To reward these homeowners with upside mortgages, the government implemented the Home Affordable Refinance Program, also known as HARP Program
The mortgage guidelines for the HARP program is relaxed

In this article, we will discuss and cover HARP Program For Homeowners With Underwater Mortgages.

HARP Program Versus Loan Modification

The HARP Program should not be confused with a loan modification.

Loan modifications are for those homeowners who have financial issues due to extenuating circumstances

Loan modifications are for homeowners who have issues such as the following:

unemployment or loss of a business
lenders often forgive a percentage of the principal balance of the mortgage loan
lenders can offer mortgage rates as low as 2% or less
With the Home Affordable Refinance Program, there is no reduction of the principal balance

Borrowers need to fully pay off the existing balance and whatever the current mortgage rates are will be the mortgage rate offered.

What Are The Qualifying Requirements For HARP?

To qualify for the HARP Program, if the current mortgage has to be owned by either Fannie Mae or Freddie Mac and mortgage loan had to have been originated and closed no later than June 1, 2009.

If the mortgage loan is not owned by Fannie Mae or Freddie Mac, homeowners will not qualify for the Home Affordable Refinance Program
Must be current on mortgage payments
Can only have one 30-day late payment in the last 12 months
More than one 30-day late payment will disqualify for the Home Affordable Refinance Program
Cannot have had a prior Home Affordable Refinance Program mortgage loan

Only a one-time HARP Program Loan is allowed.

Underwriter Mortgage Balance Limits

There is no limit on how much mortgage loan is upside down:

Can owe $300,000 on mortgage balance and home can be worth $100,000 and still qualify for a Home Affordable Refinance Program
All HARP Program loans are for rate and term refinances only
No cash out is allowed
Closing costs in refinancing the HARP loan can be added on to the balance of the new refinance mortgage
A co-borrower can be removed if the main borrower can provide that he or she has been making the payments
Requests like this are often common in cases where the homeowners were a couple but ended up getting a divorce and the non-occupant spouse wanted nothing to do with the home nor the payments of the new mortgage

On the flip side, borrowers can add another qualified borrower.

HARP Guidelines On Bankruptcy

Homeowners with a prior bankruptcy but reaffirmed the home from the bankruptcy can qualify for the Home Affordable Refinance Program.

This is as long as the bankruptcy discharge date has been at least one full year and they have been paying their mortgage payments timely from the discharge bankruptcy date

Mortgage insurance is not required with HARP loans if you did not have mortgage insurance on your current mortgage.

What If I Have A Second Mortgage? Can I Qualify For HARP Program?

The Home Affordable Refinance Program is only for refinancing first mortgages.

Second mortgages cannot be consolidated with a new HARP Program
However, homeowners can have the second mortgage or home equity loan subordinated by the second mortgage lender
Homeowners would need permission from the second mortgage lender

Most of the time, second mortgage lenders do assist and will agree to subordinate the second position with the new HARP Program.

Mortgage Rates Are At All Time Low

There are still thousands of homeowners who have not refinanced their high mortgage rate loans.

Some homeowners still have interest rates in the 6% or higher range
Should consider refinancing their homes whether is via the Home Affordable Refinance Program or just a regular standard refinance mortgage

Real estate values tanked in 2008 through 2010 and have been recovering since 2011.

Many areas in Florida, Illinois, Texas, Georgia, Maryland, Colorado, Kansas, Alabama, Michigan, Ohio, and California have seen double-digit market value increases year after year since 2011
Many homeowners with underwater mortgages do not realize that their homes are no longer underwater
They can now sell their property or refinance it at a much lower rate
There are many homeowners who contact me daily who are surprised to see that they no longer have live in their homes forever
This is because their mortgages are no longer underwater
Can now put their homes in the market and purchase another home
Consult with a realtor to see what home is worth
Homeowners who are still underwater on the mortgage, contact us at Gustan Cho Associates Mortgage Group at 800-900-8569 or text us for a faster response
Or email us at gcho@gustancho.com
Let’s see if it makes sense to explore refinancing via the Home Affordable Refinance Program or see if there are other refinance mortgage programs