Making Home Affordable
Negative Home Equity? Learn How to Refinance Now!
March 12, 2010 by James K Barath, CMPS · Leave a Comment
The Federal Housing Finance Agency has extended the government’s Home Affordable Refinance Program by 12 months.
HARP’s new end date is June 30, 2011.
Originally known as Making Home Affordable, HARP aims to help homeowners refinance their mortgage who may otherwise be ineligible because of falling home values.
There are 4 basic HARP criteria every borrower must meet:
- The existing home loan must be guaranteed by Fannie Mae or Freddie Mac.
- Your home must be a 1- to 4-unit property
- You must have a perfect mortgage payment history going back 12 months. No 30-day lates allowed.
- Your first mortgage balance must be 125% or less of your home’s market value
If you’re not sure whether Fannie Mae or Freddie Mac back your mortgage, you can look it up. Fannie’s website is http://www.fanniemae.com/loanlookup; Freddie’s is http://freddiemac.com/mymortgage. If you don’t locate your loan on either website, your mortgage is backed by a third-party and is not HARP-eligible.
For homeowners that meet HARP’s criteria, there are some underwriting details of which to be aware.
First, if your original mortgage does not require mortgage insurance, your HARP mortgage will not require it, either — regardless of your new loan-to-value.
Second, all HARP refinances require income verification. It doesn’t matter if your original mortgage was a stated income or no income verification loan. You should expect to produce 1040s and W-2s for your HARP refinance and asset statements, too.
And, lastly, second (and third) mortgages may not be “rolled in” to a new first mortgage loan balance. Junior lien holders must agree to remain in a junior lien position, regardless of combined loan-to-value.
There is a thorough HARP FAQ section on the government’s website, but it’s for general questions only. For specific Home Affordable Refinance Program information, first make sure you’re program-eligible, then pick up the phone to call your loan officer.
HARP is complex enough that you’ll want to talk with a human before taking a proper next step.
Contact James K Barath in Northwest Indiana to Qualify for Your FREE FHA Home Loan Approval Today!
Making Home Affordable
How To Know If You’re Eligible For A Making Home Affordable Refinance
April 7, 2009 by James K Barath, CMPS · Leave a Comment
Expected to help 5 million homeowners, the Making Home Affordable program “looks the other way” with respect to falling home values, approving mortgage applications based on borrower payment history and benefit to the homeowner.
Not every homeowner is eligible for a Making Home Affordable refinance, however. There are 3 basic criteria that must be met.
First, your existing home loan must be backed by either Fannie Mae or Freddie Mac. Thankfully, both companies provide online lookup services. Start with the Fannie Mae site because Fannie has a greater market share and because Freddie Mac’s site requires your social security number.
Next, you must have a perfect mortgage payment history over the last 12 months. Even one payment made 30 days late disqualifies you from participating in the Making Home Affordable program. It is okay, however, if you were 20 days late on your payment and incurred late fees.
And lastly, the balance on your mortgage cannot exceed your home’s value by more than 5%. The math formula is (Mortgage Balance) / (Home Value). If the quotient is greater than 1.05 then your loan-to-value exceeds 105% and you are not eligible for Making Home Affordable.
Now, assuming you meet the criteria, there are some noteworthy details of the Making Home Affordable program:
- If you didn’t pay mortgage insurance prior to refinancing, you won’t have to pay it after refinancing — even if your loan-to-value exceeds 80%.
- All refinances require income verification — even if the original mortgage was a stated income loan.
- Second mortgages cannot be paid off using loan proceeds — they must be subordinated
There are other guidelines, too, and both Fannie Mae and Freddie Mac have dedicated portions of their website to the Making Home Affordable program. To the layperson, unfortunately, the information may be a bit technical.
Even the government’s fact sheet can be a little dense at times.
Therefore, if you have specific questions about the Making Home Affordable program and your own eligibility, first check to see if Fannie or Freddie is backing your loan. If they are, pick up the phone and call your loan officer to plan next steps.
The program ends June 10, 2010.
Making Home Affordable
Some Homeowners Are Eligible for Mortgage Relief. Are Your One of Them?
March 5, 2009 by James K Barath, CMPS · Leave a Comment
When the White House first introduced the Making Home Affordable program in February, it was positioned as a mortgage program with two goals:
1. To help financially-needy homeowners get mortgage relief
2. To help homeowners who’ve lose equity qualify for today’s low rates
Wednesday, in a much-anticipated announcement, the U.S. Treasury introduced new details about Making Home Affordable.
It also created an “Am I Eligible For Making Home Affordable” form on its website.
In the press release, the Treasury detailed the President’s original blueprint. Namely, it provided explicit loan modification instructions that will assist up to 4 million delinquent homeowners and their respective mortgage servicers.
The modification guidelines are a thorough 17 pages long and leave little question about the loan modification process, and how it must be carried out.
But for as much ink committed to helping delinquent homeowners, the Treasury gave surprisingly little guidance to the estimated 5 million homeowners for whom deteriorating home equity has rendered refinancing impossible.
For these Americans, the Treasury instead offers a basic Q&A and directs homeowners to call Fannie Mae and/or Freddie Mac to confirm their eligibility. The “refinance plan”, in summary, says that a homeowner who has paid his mortgage as agreed and whose home value is “about the same or less” as the amount owed on his first mortgage may be eligible.
That’s about as much as the Treasury could say.
If after browsing the website, you still have questions about the Making Home Affordable program, call your mortgage lender with specific questions.
