Underwater/HARP Refinance

Hope for underwater mortgages! The new HARP 2 program (Home Affordable Refinance Program 2) was announced by President Obama in October 2011 and allows people with mortgages that are underwater (you owe more than the house is worth) to refinance into a lower rate. It doesn’t matter HOW much you are underwater! However, there are a number of conditions. These are the main ones:

#1 Your loan must be owned by one of the government agencies Fannie Mae or Freddie Mac.

Your loan may be serviced by Chase, BofA, Wells Fargo, etc, but it may be actually owned by Fannie or Freddie. Check here to see if your loan is owned by either Fannie or Freddie:

Fannie MaeFannie Mae lookup Freddie MacFreddie Mac lookup

#2 Your loan must have closed (purchase or refinance) before May 2009.

Now you’ve probably heard that the cutoff date is actually June 1, 2009. But that is the date that your loan must have been sold on to Fannie or Freddie. Practically speaking this means it must have closed/been funded by the beginning of May.

#3 You must not have missed any mortgage payments in the last 6 months, and no more than one payment in the last 12 months.

Although Fannie and Freddie have both released their guidelines for the program, even as of the beginning of March 2012 we are still waiting for the lenders to provide their “overlays”. Lenders will typically have more stringent guidelines than Fannie or Freddie, though hopefully not too much more.

Lenders will begin accepting applications around the middle of March 2012, when the Fannie and Freddie automated underwriting systems are ready. Fill in the form below and I’ll be happy to look at your current loan(s) and see if they will qualify for a HARP 2.0 refinance. It could save you hundreds of dollars every month!

Other Notes

Investment properties and second homes are allowed!

Mortgage Insurance

If you already have mortgage insurance, then it stays. If you have no MI now, you won’t be required to get it after a HARP refinance.

Second lien/HELOC/cashout

If you have a second lien or HELOC you can keep it, but you cannot roll it into the refinanced first lien. It must be re- subordinated to the refinanced first lien. You may not take out any cash.