How can the HARP Refinance Loan Program help Tucson homeowners?


By Joseph Small

The other day, we got a question from an individual with an underwater mortgage on an investment property that he owns here in Tucson, Arizona. He has been current on the payments, but was very discouraged because he has such a high mortgage interest rate and can’t refinance into a much lower one because he owes more on the house than it is worth. I asked him a few questions, then pointed out that a HARP refinance loan might be a great choice for him. He was floored and said he had never heard of such a program.

So I thought that I would take this time to explain that there are several options available to people with underwater mortgages (where you owe more than your home is worth).

What is a HARP 2 loan? HARP is an acronym for Fannie Mae and Freddie Mac’s refinance program – the Home Affordable Refinance Program. Started in 2009, the original HARP refinance loan program allowed conventional or conforming mortgages that were owned by either Fannie Mae or Freddie Mac prior to June 1, 2009 to be refinanced.

In its initial stage, only homes with an LTV or Loan-to-Value or up to 105% could be refinanced. It was soon, however, changed to a loan-to-value cap of 125%. This meant that if you owed, for example, $125,000 and your house was worth $100,000, then you could refinance if you met the programs criteria. However, if you owed $126,000 and your home was worth $100,000, then you were out of luck. For those homeowners in hard hit foreclosure States, such as Arizona, Nevada, California and Florida, this program was not helpful.

In the Fall of 2011, changes were made to the Home Affordable Refinance Program. These changes created the HARP 2 loan program. For all of the millions of responsible homeowners out there, especially in those states mentioned above, there was now hope! The change took away the 125% LTV cap and replaced it with no LTV cap. That is right, it does not matter how much you are underwater or upside down on your home loan. This is huge for those living in places like Tucson and Sierra Vista, Arizona.

With that said, there are three basic eligibility requirements that you should be aware of under the HARP 2 loan refinance program. These are:

1. Your mortgage must be backed by either Fannie Mae or Freddie Mac.
2. Your current mortgage must have been on Fannie or Freddie’s books prior to June 1, 2009.
3. You have no late payments in the past six months and no more than one 30-day late payment in the past 12 months.

What type of properties does this program apply towards? As long as it was owned by Fannie or Freddie prior to June 1, 2009 and you are current on your payments, then it does not matter what the property type is – be it an owner-occupied, second home, or an investment.

So you can see how huge of a deal this program is for the millions of responsible homeowners out there that would like to refinance to get out of an adjustable rate mortgage or ARM loan or lower their monthly payment and save money or refinance to a shorter term loan to pay off quicker. This program is going to help! Click here to learn more about the HARP Loan Refinance Program

And if you have an FHA or VA loan and are underwater, then there are programs that might be able to help you. Such as: FHA Streamline Refinance.

– Joseph Small and his Team at Guild Mortgage Company is Tucson’s VA, FHA and HARP home loan mortgage experts! Give them a call if you have any mortgage related questions. Tucson: (520) 303-5620 Phoenix: (480) 788-9221.
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