Details Of HARP 2.0
Article by Christopher M Lee
The government’s Home Affordable Refinance Program has received much attention in recent months. After a disappointing first run, clinic the program has been revamped in effort to include more at-risk homeowners and provide help to those who may have not previously qualified.
The Basics
HARP is part of the Making Home Affordable Program initiative to help homeowners struggling with mortgage debt and foreclosure. The program requires that anyone interested in refinancing their mortgage have a mortgage backed by Fannie Mae or Freddie Mac, for sale which is the case for the majority of homeowners with conventional loans. The mortgage also must have been secured prior to May 21, 2009. Applicants must also be current on the mortgage payment and cannot have had more than one late payment over the last year.
The New Program
Although these program requirements seem strict, the new HARP has actually broadened its horizons and made several changes to the rules. First, the loan-to-value limit cap has been eliminated. Previously, there was a 125 percent cap on the amount of mortgage debt owed compared to the value of the home, meaning anyone that 25 percent more on the mortgage than the home’s value was disqualified. Many homeowners who are considered underwater on their homes exceeded this value, leaving them without options to refinance. The new HARP does not have any specified loan-to-value limit cap in order to qualify.Second, the revised program has eliminated automatic appraisals and some of the fees associated with refinancing. According to HARP 2.0 guidelines, homeowners no longer have to obtain, and pay for, an actual appraisal on the home, but can use an automated estimate system to determine the value on the home. The closing cost fees have also been reduced or eliminated to make refinancing more affordable for qualified homeowners. The 2 percent upfront fee requirement has been eliminated, as well as put a 0.75 percent cap on fees for 30 year refinanced mortgages.
The new program has also expanded the reach for owners of condominiums, who were previously ineligible to qualify for refinancing. These days, underwater condo owners may be eligible for the program regardless of the percentage of units that are considered underwater or delinquent. The old program also required that applicants meet certain income requirements in order to qualify for the HARP offer. Under HARP 2.0, there is no income verification requirement for applications. The last, and perhaps most important change, is that the new program will be in effect until December 31, 2013.
About the Author
The attorneys, of Lee Law Firm, understands that financial hardships can affect honest, hard-working people. Their early experience growing up in hard working families made a significant impression on their business philosophy today. As a foreclosure Dallas, Tx attorney their practice has given them the opportunity to directly impact the lives of many people.
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