Friday, October 28, 2011

As Many Details as Possible About the New Housing Refinance Plan

The newest changes to HARP (Home Affordable Refinance Program) have been announced with much fanfare, and here's the best I source I could find on the latest refinance scheme.  The part that caught everybody's eye was that 1) homes could be "underwater" (with a mortgage bigger than their current worth.  In this case, up to 125% of the loan to value ratio.) and eligible and 2) some of the fees have been cut out.  The fees in question are risk-based fees for borrowers who are refinancing into a shorter length of mortgage, and the need for new property apraisal in cases where there is a reliable automated valuation model.  Also, the length of the program itself is extended till the end of December, 2013 for loans sold before May 31, 2009.

Who is eligible?  For one thing, your loan has to be guaranteed by Freddie Mac or Fannie Mae.  If you're not sure, there's an easy way to find out: you can look up your home by address to see if Fannie guaranteed the loan, or Freddie.  You also need to be current on your payments: no late payments in the last 6 months, and no more than 1 in the last year. 

Ah, but here's the rub:
"Since industry participation in HARP is not mandatory, implementation schedules will vary as individual lenders, mortgage insurers and other market participants modify their processes. "
So, you're still dealing with the willingness of your lender to modify the loan. 

So, contact your lender to see if they can work with you, but if you are in danger of foreclosure, please contact a HUD-approved counselor in your area to get rippoff-free advice on how to hang onto your house.  These counselors are not with HUD, but nonprofits that know the housing and foreclosure field.  And do it sooner, rather than later.

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