California’s Underwater Home Refinance- Hope for Homeowners

California’s Underwater Home Refinance- Hope for Homeowners

If you are under water on your current loan balance in relation to your homes value in California you need to read this. If after you read this you are more confused than ever, feel free to call me. I am happy to interpret this foreign language called Mortgage Lingo.

The Home Affordable Refinance Program (HARP) has been extended.  The program’s new expiration date is June 30, 2012.

If you’re underwater on your conforming, conventional mortgage, or high balance mortgage you may be eligible to refinance your home without paying down principal or having to pay mortgage insurance.

Let’s Explore HARP further

HARP goes by several names. I use the blanket name HARP because that’s what the government and mortgage industry calls it. The program is also known as the Making Home Affordable plan, the Obama Refi plan, Relief Refinance, and Underwater Home Refinance here in California.

What you need to know first for the HARP Refinance are these two points:

  1. Only Fannie Mae- and Freddie Mac-backed loans are HARP-eligible
  2. Your current mortgage must have a securitization date prior to June 1, 2009

If you don’t meet these two criteria, you are HARP-ineligible. Period.

How do I know if Fannie Mae or Freddie Mac has my mortgage?

Both Fannie Mae and Freddie Mac have posted “lookup” forms on their respective websites.Check Fannie Mae’s first because Fannie Mae’s market share is larger. If no match is found,then check Freddie Mac.

If you’re one of the lucky homeowners who meet the requirements you can now read the second half on this article on specifics of the HARP refinance.

Common Questions and Answers:

Q: Fannie Mae/Freddie Mac own my loan; now what do I do:

A: You are in luck. The first step in to qualify as you would for a standard mortgage including Tax returns pay stubs and so on.

Q: My current mortgage is owned by Fannie Mae but I planned on missing a payment intentionally so the bank would listen to me. Am I qualified for the HARP refinance?

A: NEVER miss a payment intentionally if you can avoid this. You would not be eligible for the HARP refinance if you are not current on your mortgage.

Q: What are the minimum requirements o be eligible for the HARP refinance program?

A: First, your home loan must be current. You may not be delinquent or behind in your payments. Second, you can’t be more than 25% underwater on your home. Officially, this is known as having a 125% loan-to-value. Third, your mortgage must have been originated and sold to Fannie or Freddie prior to June 1, 2009.

Q: When I bought my home in 2009 in Dublin, CA I put down 20% down payment to avoid mortgage insurance. I currently lost my home equity according to various value websites. Will I have mortgage insurance with this refinance?

A: NO- The rule states that if your current mortgage dos not have mortgage insurance the new loan would not as well. (This is a great option for many Bay Area home buyers whom purchased and experienced the housing double dip after the expiration of the first time home buyers tax credit. Message me below for more details).

Q: I have an investment property, in fact I have almost 10 I bought and a few are underwater but owned by Fannnie Mae, do I qualify?

A: Yes, you can refinance an investment/rental property with HARP, but only if the home was originally financed as an investment property. You can’t HARP-refi a home that was originally a primary residence and is now considered a rental.

Q: Do I have to refinance with my current loan servicer to be eligible?

A: No, I am a Mortgage Loan Originator at Vintage Mortgage Group in Pleasanton. I would be happy to council you on these programs.

Q: I have a high Balance loan in the Bay Are does this qualify?

A:  Yes- Well sort of. Certain banks have rules on top of the government program. HARP refinances are limited to the lesser of 125% of the home’s value, or the area’s conforming loan limits. In most cities, the conforming loan limit is $417,000. However, there are some cities in which conforming loan limits are as high at $729,750.

Q: I have no money for closing costs, can I roll them into the loan?

A: Yes, mortgage balances can be increased to cover closing costs in addition to other monies due at closing such as escrow reserves, accrued daily interest, and a small amount of cash.  In no cases may loan sizes exceed 125% of the home’s value, nor may they exceed the local loan limits.

Q: How long will it take to close a HARP Refinance?

A: The program is similar to a standard refinance. With that said I generally advise my clients to lock longer term because there are many gray area with underwater home refinances. While rates are low as they are today I recommend a 45 day rate lock.

Q: How can I apply for a HARP Refinance:

A: Follow this link Apply now

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My  is to help you the client FIRST and provide you a source of information. With over a decade in the mortgage lending business I will be happy to explain to you in real terms your options. Please message me below with any questions. It is my pleasure to walk you through options that are available to help you.




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