Loans For Underwater California Homeowners Now Available- 3/19/2012

Loans For Underwater California Homeowners Now Available- 3/19/2012

 

The new, revamped HARP program is now available in the Bay Area, California and  nationwide. It was officially released Saturday, March 17, 2012 by Fannie Mae and Freddie Mac with some lenders implementing it Monday morning.

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

Here are the details of the government’s new 2012 HARP refinance program.

What Is HARP?

HARP is an acronym. It stands for Home Affordable Refinance Program. HARP is the conforming mortgage loan product meant for “underwater homeowners”. Under the HARP program, homeowners in Dublin, CA can get access to today’s low mortgage rates despite having little or no equity whatsoever.

HARP is expected to reach up to 6 million U.S. homeowners who would otherwise be unable to refinance.

HARP is not a new program. It was originally launched in 2009. However, the program’s first iteration reached fewer than 1 million U.S. households because loan risks were high for banks, and loan costs were high for consumers.

With HARP’s re-release — dubbed HARP 2.0 — the government removed many of HARP’s hurdles.

In order to qualify for HARP, homeowners must first meet 3 qualifying criteria.

First, their current mortgage must be backed either Fannie Mae or Freddie Mac. Loans backed by the FHA or VA are ineligible, as are loans backed by private entities. This means jumbo loans and most loans from community banks cannot be refinanced via HARP.

  • To check if your loan is Fannie Mae-backed, click here.
  • To check if your loan is Freddie Mac-backed, click here.

The second qualification standard for HARP is that all loans to be refinanced must have been securitized by Fannie Mae or Freddie Mac prior to June 1, 2009. Mortgages securitized on, or after, June 1, 2009 are HARP-ineligible.

There are no exceptions to this rule.

And, lastly, the third HARP qualification standard is that the existing mortgage must be accompanied by a strong repayment history. Homeowners must have made the last 6 mortgage payments on-time, and may not have had more than one 30-day late within the last 12 months.

If the above three qualifiers are met, HARP applicants will find mortgage guidelines lenient overall :

  • Refinancing into a fixed rate mortgage allows for unlimited loan-to-value
  • The standard 7-year “waiting period” after a foreclosure is waived in full
  • Except in rare cases, home appraisals aren’t required for HARP

Furthermore, HARP mortgage rates are on par with non-HARP rates. This means that HARP applicants get access to the same mortgage rates and loan fees as non-HARP applicants. There’s no “penalty” for using HARP.

Frequently Asked HARP Questions:

What if my lender won’t give me a HARP refinance because I have mortgage insurance?

If your lender tells you that you can’t have a HARP 2.0 loan because you have mortgage insurance, find a new lender. There are plenty that of banks that can — and want to — help you

Can I refinance an investment/rental property with HARP?

Yes, you can refinance an investment/rental property with HARP, even if the home was once your primary residence. You can refinance a home on which you’re an “accidental landlord” via HARP. The loan must meet typical program eligibility standards.

I am unemployed and without income. Am I HARP-eligible?

Yes, you do not need to be employed to use the HARP mortgage program. HARP applicants do not need to be “re-qualified” unless their new principal + interest payment increases by more than 20%. If the new payment increases by less than 20%, or falls, there is no re-qualification necessary.

I’m Here to Help You With Your Underwater Home Refinance Questions

I love to work with readers that find my information on the Mortgage and Housing Market helpful in your decision making process. As a Mortgage Planner at Vintage Mortgage Group in Pleasanton, California I am in a unique position to help you capitalize on historically low interest rates in 2012. Contact me below today to help you get started.

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