On Monday, October 24, 2011, the government announced several changes to the Home Affordable Refinance Program (HARP) to allow more homeowners to refinance their mortgages and take advantage of the current historically low interest rates.Most importantly, the revised HARP Program will allow homeowners whose homes are more than 25% “under water” to become eligible to refinance at lower interest rates. Homes are defined as “under water” when the value of the mortgage exceeds the current value of the home.However, as with many government programs, the new HARP Program will not benefit homeowners who are delinquent in their mortgage payments or are in active foreclosure.
Eligibility criteria for this program is strict, and includes the following:
- The existing mortgage must be owned by Fanny Mae or Freddy Mac.
- The homeowner must be current on his/her loan. Only one late payment during the past twelve months will be acceptable.
- The homeowner may not be in foreclosure.
- The original loan may not be a sub-prime loan.
- The home can be a primary residence, condominium, co-op or investment property.
For those of you or your clients who are weathering the current recession, the revised HARP Program may allow you to benefit from the current economic crisis.For those one million Americans who are facing foreclosure this year, the HARP Program will not bring the relief so sorely needed.