Do you wish you could refinance, but you are underwater? Help is available!

HARP
    HARP 2.0

Home Affordable Refinance Program 2.0 is intended to help homeowner's who are current on their mortgage payments and qualify under the income and credit guidelines, but are considered "underwater" because the value of their home may have declined significantly and are unable to refinance due to loan program restrictions. This program is not intended to help homeowners who cannot afford their current home.

These homeowners bought their homes several years ago borrowing at an interest rate in the 6% range, put 20% down and now want to refinance at the current rates of 4% or below. Unfortunately, they are not able to do so because the values in their neighborhood declined to the extent that their equity is gone and despite the large down payment, their loan is over 100% to value.

What prevented the success of the original HARP program?
1    Under the original program, the homeowner could not refinance their loan if they owed more than 125% of what their homes were worth
1    Second mortgage lenders were reluctant to agree to resubordinate behind a new mortgage
1    Private mortgage insurers were reluctant to transfer the insurance policy to the new mortgage
1    Fannie Mae/Freddie Mac added price adjustments that eroded the benefits of refinancing
1    Lenders still had a high liability on the higher LTV's

HARP 2.0 actually encourages homeowners to go into a shorter term loan such as a 15 or 20 year vs. the traditional 30 year, which helps them build their equity faster and pay off the loan faster. This minimizes the reluctance of the subordination of the second mortgage lenders and that of the private mortgage insurers. The Fannie Mae/Freddie Mac price adjustments are eliminated; the lenders are no longer liable for following the rules of the program as designed and the LTV cap of 125% is no longer applicable.

Who is eligible?
1    The mortgage must have been sold to FannieMae/Freddie Mac before June 1, 2009
1    They must be current on the mortgage and have no late payments in the last 6 months. A late payment is defined as one that’s more than 30 days overdue
1    Must not have had more than one late payment in the past 12 months
1    This must be the 1st refinance through the HARP program

This program is a WIN for thousands of underwater homeowners who now have the opportunity to lower their monthly mortgage payments.


For more information about programs, current interest rates, and how to attract more qualified buyers or sell more homes, call your Sovereign Mortgage Development Officer, Tiffany Liebsch at 603-502-1080.