Everybody asked me, “Hey, I’m upside down in my loan, but I’ve never missed a payment. Why can’t I refinance and take advantage of the lower rates?”
This is a good question and the answer has a lot to do with making our economy better. Basically, rather than allowing a ton of properties to foreclose, the government could take a smaller loss by just allowing you to refinance at a lower rate, even if your house is worth less than the market. This puts actual dollars in the economy!
That is what the Obama Administration is doing now. Here’s the take away message: call the lender who gave you your loan and ask them if you can do this.
As you may recall, The Federal Housing Finance Agency and the Department of the Treasury introduced HARP in early 2009 as part of the Obama Administration’s Making Home Affordable program. HARP is only one of several refinancing options available to homeowners. This plan in unique in that it is the only refinance program that enables borrowers who owe more than their home is worth to take advantage of low interest rates and other refinancing benefits. Since April 2009 when HARP has helped approximately nine million families refinance.
To qualify you must meet the general criteria. Only mortgages sold to Fannie and Freddie on or before May 31, 2009, are eligible for refinance under HARP. To learn if your mortgage is owned or guaranteed by Freddie Mac or Fannie Mae, you can visit their websites. Borrowers must be current on their loans and have no late payments in the last six months. Your current loan-to-value (LTV) ratio must be greater than 80%. Mortgages that have borrower-paid mortgage insurance may refinance, but borrowers must keep the same level of mortgage insurance they had on the previous loan. And homeowners who have already refinanced through HARP are ineligible to refinance again.
So, why these changes now? When it was launched in March 2009, the program failed to meet regulators’ expectations. With mortgage interest rates at historic lows, now is a great time for eligible borrowers to refinance. Importantly, such refinances bring benefits to borrowers, to housing markets, and to the Enterprises and taxpayers.
The proposed these enhancements become available November 15th. If you have questions you can contact mortgage consultant Jeannie Bolger 602-385-4812. We are not certain what all of the rules will say on November 15th, but Nova Home Loans should be able to help you, regardless of where your original loan came from.