Apparently, a federal refinance program with the staying power to help 2.2 million homeowners ascend from underwater mortgages is buoyant enough to float for another two years.
The Federal Housing Finance Agency (FHFA) recently directed Fannie Mae and Freddie Mac to extend the Home Affordable Refinance Program (HARP) until Dec. 31, 2015.
The Obama Administration's Making Home Affordable refinance relief program was set to expire Dec. 31, 2013.
Apparently HARP's successes have been sufficient even without hardier upgrades.
Many HARP critics said the program should also include Federal Housing Administration (FHA) mortgages and other loans.
However, the program has also played a part in the housing recovery by giving struggling homeowners time to hold out until values returned.
Along with the extension, FHFA plans to launch a public outreach program to inform homeowners about the program.
HARP refinances mortgages to a lower interest rate and smaller monthly payments to help struggling homeowners, including those who have a mortgage than is larger than their home is worth.
FHFA apparently sees the trend of low interest rates and rising home values combining to make such a refinance quite a windfall for many struggling homeowners.
"More than 2 million homeowners have refinanced through HARP, proving it a useful tool for reducing risk. We are extending the program so more underwater borrowers can benefit from lower interest rates," said FHFA Acting Director Edward J. DeMarco.
To be eligible for the much upgraded HARP, homeowners must meet the following guidelines:
- The loan must be owned or guaranteed by Fannie Mae or Freddie Mac.
- The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
- The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
- The current loan-to-value (LTV) ratio must be greater than 80 percent.
- The borrower must be current on their mortgage payments with no late payments in the last six months and no more than one late payment in the last 12 months.
Since early 2009, HARP been available to provide refinancing for otherwise ineligible homeowners - homeowners who suffered declining home values or reduced access to mortgage insurance following the mortgage crisis.
FHFA warns borrowers not to fall for fraudulent rescue services that promise to offer HARP refinances.
HARP loans come direct from the homeowner's lender.
FHFA also advises that HARP loans are available for investment properties and condos, not just single-family owner occupied homes.
And other legitimate programs are available for struggling homeowners.
Published: May 1, 2013
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