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Obama’s Refi Plan- Changes to HARP

Friday, February 3, 2012 0:40

Home Affordable Refinance Program

The Obama administration is changing a refinancing program so that more underwater borrowers can qualify.

The Obama administration is revamping a program that’s designed to let more homeowners refinance their mortgages even if they don’t have any equity. This isn’t a new program, but instead attempts to turbo-charge an existing federal initiative called the Home Affordable Refinance Program (HARP).

What is HARP? The Obama administration in 2009 rolled out HARP to refinance borrowers whose loans were backed by Fannie Mae and Freddie Mac and who were current on their payments. The idea was simple: If you were making your payments on time but didn’t have enough equity to refinance, you would be able to lower your rate without having to pay down your mortgage balance or take out mortgage insurance. Initially, the program was limited to borrowers who owed between 80% and 105% of the value of their homes. In mid 2009, the program was opened to borrowers who owed up to 125% the value of their homes. But a series of unforeseen “frictions” have led fewer borrowers to take up on the offer lower rates. Fewer than 900,000 homeowners have refinanced under HARP over the past 21 years, and just 72,000 of those borrowers have loan-to-value ratios between 105% and 125%. Will I be able to refinance through HARP if I’ve already used the program once? No. The program will continue to be limited to loans that were delivered to Fannie and Freddie before June 2009, which means that anyone who has already refinanced under HARP won’t be able to refinance again. What other changes are being made to improve HARP? One of the most important changes addresses the risk that banks will have to “buy back” defaulted mortgages from Fannie and Freddie if the loans are discovered to run afoul of underwriting rules. This has prompted banks to scrutinize appraisals and require extensive documentation of borrowers’ incomes on loans for which they don’t already collect payments, even if Fannie and Freddie already guarantee those loans. As a result, some borrowers can only qualify for HARP by going to their current mortgage servicer, rather than shopping around for the best rate.How will this change help borrowers? This will streamline the refinance process, eliminating the need in many cases for borrowers to obtain appraisals or to provide extensive income documentation. Instead, borrowers will have to show that they’re current on their mortgage, that they have a job or another source of regular income, and that they meet the other eligibility criteria for HARP.		What if I have mortgage insurance? Mortgage insurers have also agreed to make it much easier to transfer existing mortgage insurance coverage, which has blocked many borrowers from refinancing. What if I have a second mortgage? Borrowers with a second mortgage, such as a home-equity loan, need the mortgage owner to agree to “re-subordinate” the loan before refinancing the first mortgage. Federal officials say the largest lenders have agreed to automatically re-subordinate all second mortgages under HARP.What else is being done to lower costs? Another change involves fees that Fannie and Freddie charge banks for riskier borrowers. The firms, and their regulator, the Federal Housing Finance Agency, have agreed to waive those fees for borrowers who refinance into loans with a shorter term, such as a 15-year mortgage. They’ll also reduce the fees.When will these changes take effect? Fannie and Freddie will issue final pricing information and other technical details around Nov. 15, 2011 and some banks could begin taking applications under the new program as soon as Dec. 1, 2011. The HARP program will also be extended through 2013, beyond its current expiration date of June 2012, in order to encourage lenders to invest more resources into staffing up the program. How do I find out if Fannie and Freddie own my mortgage? You can look that information up online for Fannie Mae and Freddie Mac. What if Fannie or Freddie don’t own my loan-can I refinance through this program? No. That’s a major limitation, of course, because “jumbo” mortgages aren’t held by Fannie and Freddie, and many of the most underwater subprime mortgages are in privately held mortgage securities that weren’t issued by Fannie and Freddie. How many mortgages could be refinanced as a result of the changes? The Federal Housing Finance Agency estimates that another 800,000 to 1 million borrowers could refinance through HARP as a result.
Source: Associated Press

The Home Affordable Refinance Program (HARP)

Friday, October 28, 2011 0:32

What you Need to Know

On Monday, the federal government announced that it would revise the Home Affordable Refinance Program, also known as HARP.   The program was actually released back in 2009 and was designed to help underwater homeowners refinance, so far it’s reported to have helped less than one-tenth of the 5 million borrows it was aimed towards helping. 

The new enhancements will allow some that are not eligible able to refinance under the current guidelines, to be able to do so.  One of ways is to lift the cap that was imposed on those who owe more than 125% of what their property is worth from using the program.  More details of the new program are set to release on November 15th.

You should also know that HARP can only help those who have Fannie Mae or Freddie Mac owned mortgages and nobody else.  They also have had to be owned by Fannie or Freddie by May 31st, 2009.  

For those of you who are seeking the assistance of HARP, the best place to start is with your local trusted lender.  Have them check to see if your loan is owned by Fannie or Freddie.  However, because the final changes are set to publish in mid-November, lenders may be unsure until then how to proceed until then.

Stay tuned for more updates, or email us directly if you wish to learn more of this program as more is revealed.

Carlsbad Family Movie Night

Friday, September 16, 2011 9:00

Family Movie Night at Stagecoach Park

City of Carlsbad Parks & Recreation will show the classic movie “E.T. The Extra-Terrestrial” on Family Movie Night outdoors in the Park, Saturday, Sept. 17 at Stagecoach Park, 3420 Camino de los Coches, Carlsbad.  Family fun activities start at 6 p.m. and the movie begins at 7:30 p.m.  A $5 activity wristband is available for purchase at the event for activities from 6 – 7:20 p.m.  Movie admission is free. 

This is an exciting family-friendly, community event and pre-movie activities include a Fun Zone with games and craft activities.  A $5 activity wristband is required for Fun Zone activities but movie admission is free.  Food and beverages are also available for purchase:  ice cream, popcorn, candy, hot dogs, pizza, nachos and lemonade.
In addition, take part in a special fund-raising opportunity for the Opportunity Grants Program. $1 will buy you a chance to spin the wheel for prizes that include tickets to LEGOLAND’s Sealife Aquarium and a Grand Prize of a bicycle!
Please bring your own low-back chairs and blankets and be prepared to share a night of fun with your family and friends!  The date will be modified or canceled if weather requires it.

Carlsbad Market Trends

Thursday, September 15, 2011 15:46

Real Estate Trends for Carlsbad, CA

Carlsbad Market Update

Friday, August 26, 2011 23:26