Loan originators striving to help “underwater” customers and prospects, and continue expanding their own business should be taking advantage of the updated Home Affordable Refinance Program (HARP). The program allowing homeowners with loans owned by Fannie Mae or Freddie Mac to refinance “under water mortgages” into lower interest rates was recently extended until December 31, 2013.
The key change announced last year in HARP 2.0 is that there will be no limit on how much a homeowner owes on their mortgage (regardless of the property’s value). In addition, there is no minimum credit score and no appraisal is necessary.
The updated HARP program was in force last December 1 for borrowers with an LTV ratio of less than 125 percent and in the first quarter of 2012 for those with an LTV of greater than 125 percent.
To qualify for HARP, the borrower must live in the home being refinanced and able to afford the new lower payment, the current mortgage must be current with no late payments in the past 12 months, and the new loan payments must be more affordable or stable than those from existing loan,
Lenders will enact their own schedule for implementing changes. Some started to accept mortgage applications under the new enhancements last December, while others will do so later.