Somewhere in the neighborhood of 600,000 homeowners may be interested in the announcement by FHFA head Mel Watt last Friday in California. In a prepared statement he gave at the Greenlining Summit, he announced that the HARP and HAMP programs would be extended through December 31, 2016 (currently they are set to expire at the end of 2015) and that many people who could benefit from getting HARP approved still haven’t done so.
From his remarks:
In the meantime, we want to encourage the 600,000 plus borrowers nationwide who would still benefit from the HARP program to take advantage of HARP while they still have the opportunity to do so and while interest rates remain low. Approximately 31,000 of these borrowers are right here in California, and we want them to join the nearly 3.3 million borrowers who have already taken advantage of HARP to reduce their monthly payments and obtain some financial relief.
Who Holds Your Mortgage?
If you are interested in the HARP program, one of the first things you want to do is figure out if your loan is backed by Fannie Mae or Freddie Mac. Both have tools on their websites to see if they own your loan.
If you currently have an FHA loan or VA loan, the bad news is that you won’t be eligible for the HARP program – but don’t worry, there is good news. The good news is that there are refinance programs available to help you called the FHA streamline and the VA streamline that are designed to help you get a lower interest rate and have more flexible guidelines than conventional loans.
HARP: Refinance While Rates Are Low
The Home Affordable Refinance program was announced by President Obama in March of 2009 and it has become one of the most popular refinance programs in the last couple of years for people all across America.
HARP 1.0 program had modest success due to loan-to-value restrictions and was modified to HARP 2.0 in 2011 when it was announced that loan-to-values could be higher than 125%. Currently, there are multiple lenders that will do a HARP refinance with an unlimited LTV – which means it doesn’t matter how far under water your home is, it will not be a determining factor in qualifying for the HARP program.
Interest rates are at historical lows, and it is probably safer to say that they will rise in the future vs. go down. The real question is “how long before they rise?” HARP has been available for people to refinance for a few years now and while somewhat surprising that even though millions of people have already refinanced under HARP, there are still hundreds of thousands who haven’t.
Thinking that you may want to beat the deadline and see if the HARP program is for you? Here are just a few resources that can help you: