New Refi Program Geared to Help Homeowners

Posted by scottkooiman October - 25 - 2011

For homeowners who are seeking help with their mortgage rates, the Obama administration announced Oct 24 that they will be expanding the current HARP program to allow more homeowners to benefit from the federal program.

With roughly 40 percent of Valley homeowners being underwater, most were unable to take advantage of the HARP program, which required homeowners to have a loan-to-value ration not in excess of 125 percent. Most Arizona homeowners seeking help with their mortgage were more underwater than that.

In addition, with a HARP refinance, a premium was added to the new rate, so homeowners seeking help through HARP could not enjoy the rates new homeowners were receiving. While the rates were lower than their current loans in most cases, they still were not as low as the market rates all of their friends were talking about.

The new HARP proposal eliminates some of these issues. It eliminates the cap of 125% loan to value ratio, and allows any amount of “upside-downedness” to qualify. The premiums will also be eliminated or reduced.

To qualify, homeowners need to have received a loan serviced by Freddie Mac or Fannie Mae before May 31, 2009.

For more detailed information, see Jeremy House‘s article on the new HARP changes.