“Underwater” Refinance Program

Nov 15th, 2011 | By | Category: Market Update

Underwater Mortgage | Mortgage Tips | Mary benavides | Shauarita UpdateThe Federal Housing Finance Agency, with Fannie Mae and Freddie Mac have announced a series of changes to the Home Affordable Refinance Program (HARP) in an effort to attract more eligible borrowers who can benefit from refinancing their home mortgage, even if their house is worth less than their current mortgage balance. The program enhancements were developed at FHFA’s direction with input from lenders, mortgage insurers and other industry participants. The final guidelines are expected to be announced soon.

Borrower Eligibility
• The existing mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.

Homeowners can determine if they have a Fannie Mae or Freddie Mac loan by going to:
www.FannieMae.com/loanlookup/ or calling 800-7FANNIE (8 am to 8 pm ET)

ww3.FreddieMac.com/corporate/ or calling 800-FREDDIE (8 am to 8 pm ET)
• The program will continue to be available for loans with LTVs (Loan to Value) above 80 percent.
•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 new program enhancements address several other key aspects of HARP including:

• Eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers;
• Removing the current 125 percent LTV ceiling for fixed-rate mortgages backed by Fannie Mae and Freddie Mac;

Eliminating the need for a new property appraisal where there is a reliable AVM (automated valuation model) estimate provided .

The details for this new program are still emerging, so check with your lender for updates.