Preventing Foreclosure
New Plan to Help Underwater Homeowners
To help eligible homeowners refinance their mortgages at a lower rate, the Federal Housing Finance Agency (FHFA), with Fannie Mae and Freddie Mac, has made the Home Affordable Refinance Program (HARP) more accessible to borrowers.
Which borrowers may be eligible for an enhanced HARP?
In general, borrowers must meet the following criteria:
- The existing mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
- The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
- Homeowners can determine if they have a Fannie Mae or Freddie Mac loan by going to: http://www.fanniemae.com/loanlookup/or calling 800-7FANNIE (8 am to 8 pm ET) https://www.FreddieMac.com/corporate/or 800-FREDDIE (8 am to 8 pm ET)
- The current loan-to-value (LTV) ratio must be greater than 80%.
- Borrowers must be current on their mortgage payments with no late payment in the past six months and no more than one late payment in the past 12 months.
- 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.
When will these enhancements become available?
Timing will vary by mortgage lender. The Enterprises will be sending operational instructions to lenders by November 15th. Some lenders may be able to accommodate mortgage applications under some of the enhancements by December 1 while it could take other lenders additional time to incorporate the expanded program into their systems. In addition, some of the enhancements such as delivery of loans with LTV greater than 125 should be operational during the first quarter of 2012.
Read More »What about borrowers whose loans are not owned or guaranteed by Freddie Mac or Fannie Mae?
Neither FHFA nor the Enterprises have the legal authority to extend HARP to borrowers whose mortgages are not owned or guaranteed by Fannie Mae or Freddie Mac.
What do borrowers need to do to take advantage of HARP?
The first step is for the borrower to learn if his or her mortgage is owned or guaranteed by Freddie Mac or Fannie Mae by visiting the Enterprises’ websites. Each Enterprise has a web tool for that purpose. If the mortgage is owned or guaranteed by Fannie Mae or Freddie Mac, the borrower should contact his or her existing lender or any other mortgage lender offering HARP refinances.
Are offers from companies promising to help borrowers get HARP loans legitimate?
Borrowers do not need to use third party companies that advertise themselves as "mortgage experts" or "foreclosure specialists" to apply for a HARP loan. Before calling such companies borrowers should talk first with their mortgage lender.
Is there a maximum loan-to-value (LTV) ratio for HARP?
There is no longer a maximum LTV limit for borrower eligibility. If the borrower refinances under HARP and their new loan is a fixed rate mortgage, there is no maximum LTV. If the borrower refinances under HARP and their new loan is an adjustable rate mortgage, their LTV may not be above 105%.
More information about this program and answers to other frequently asked questions are available at the FHFA and Rhode Island Housing websites.
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