Obama HARP Refi Plan - Politics or real help?
This seems to be more political rhetoric than real help to the bulk of the homeowners in difficulty. It expands the existing program by taking off the high limit to refinance for underwater owners. Until now, you could not refinance if you were under water by more than 125%. Now you can, but only of you have a Fannie Mae or Freddie Mac loan from before 6/1/2009.
Pretty limiting increase but it looks great in the headlines. Don't get me wrong, this will be a help to some people but it does nothing to help the 6.3M homeowners who have missed several payments. HARP states you must be current for the last 6 months.
According to RealtyTrac, September marked the 12th straight month where foreclosure activity decreased on a year-over-year basis. But October’s report showed one in every 213 U.S. households with a foreclosure filing in the third quarter of 2011.
It does not modify the loan, just allows for a "short refi".
HARP Refinance Program Explained
Borrowers who are current on their home loans may be able to refinance for lower interest rates, even if they are seriously upside down. The Federal Housing Finance Agency (FHFA) announced today that it will broaden the scope of the Home Affordable Refinance Program (HARP) by removing the current 125 percent loan-to-value cap for fixed-rate mortgages backed by Fannie Mae and Freddie Mac. Other program enhancements include, among other things, reducing certain fees, eliminating the need for a new property appraisal if the FHFA has a reliable automated valuation model (AVM) estimate, and extending HARP until the end of 2013. New federal guidelines for the HARP changes should be released to mortgage lenders and servicers by November 15.
The basic eligibility requirements for an enhanced HARP loan are as follows:
· Existing mortgage loan must be owned or guaranteed by Fannie Mae or Freddie Mac. To check whether a borrower has a Fannie Mae or Freddie Mac loan, go to http://www.makinghomeaffordable.gov/get-assistance/loan-look-up/Pages/default.aspx.
· Existing mortgage loan must have been sold to Fannie Mae or Freddie Mac before June 1, 2009.
· Existing mortgage loan cannot have been refinanced under HARP previously (except for Fannie Mae loans refinanced between March and May 2009).
· Current loan-to-value (LTV) ratio must be more than 80%.
· Existing mortgage loan must be current, with no late payments in the past six months, and no more than one late payment in the past 12 months.
More information is available from FHFA at http://www.fhfa.gov/webfiles/22721/HARP_release_102411_Final.pdf.