Significantly expanded Home Affordable Refinance Program assists “underwater” homeowners with their refinancing needs.
Five years ago the real estate bubble burst and the mortgage industry imploded in the largest U.S. financial melt-down since the Great Depression. In an effort to help “at-risk-homeowners” avoid foreclosure, the Federal Government intervened and created the Home Affordable Refinance Program (HARP) in 2009. Through direct lenders like Bay Equity Home Loans, HARP has successfully helped many homeowners refinance out of high risk, sub-prime and adjustable rate loans into low fixed rate mortgages. With the recent extension of HARP through 2015, the Government expects millions more will benefit from the program.
“When HARP was first introduced, it was fairly limited in its scope and excluded many homeowners,” says Tim Carroll, Sales Manager at Bay Equity Home Loans in Santa Rosa (www.refinancesantarosa.com). However, in 2012 the program was expanded significantly and millions of additional homeowners became eligible for the program. According to Carroll, the single biggest enhancement to HARP was increasing the program to allow for an unlimited loan to value (LTV). In other words, it does not matter how upside down a homeowner is, if they qualify for the program, they may be able to refinance into a low fixed rate mortgage. In many cases the program offers an appraisal waiver, saving time and money for eligible Home Owners.
In spite of the expanded eligibility guidelines offered by HARP, many banks and mortgage lenders were reluctant to offer the program to its fullest extent. As a result, many homeowners who met HARP guidelines were turned down by their bank and denied the benefits of the program. Recently a handful of mortgage lenders have made the HARP available to more Home Owners. “Bay Equity Home Loans has really stepped-up to the plate,” explains Carroll. “While most banks and lenders refuse to help homeowners who are significantly underwater, we reached out to them and expanded our program. I personally have helped homeowners that were upside down by $150,000 or more.”
George Adair, Area Manager for Bay Equity Home Loans, points out, “To pre-qualify for HARP there are two critical requirements of a homeowner and their loan. First, your current mortgage must be owned by Fannie Mae or Freddie Mac. Secondly, Fannie or Freddie must have purchased the loan prior to June 1, 2009.” According to Adair, most homeowners will likely not know who owns their loan and he recommends they call their current lender or servicer to verify this information.
There continues to be Federal and Congressional efforts to enhance HARP to assist more homeowners in the future. The biggest change being discussed is expanding the program to include homeowners whose loans are not currently held by Fannie Mae or Freddie Mac. “If this happens there will be millions of ecstatic homeowners who are currently sitting on the sidelines anxiously waiting,” states Carroll.