Friday, February 10, 2012 - Article by: VAMORTGAGE411 - Integrity Mortgage Group -
The Home Affordable Refinance Program (HARP) is a program of the federal government aimed at helping mortgage borrowers, particularly those with little or negative equity for a traditional refinance. When it first debuted, it didn't impress. A big reason for HARP's failure was that it depended on lenders voluntarily reducing the interest rates of captive borrowers who were repaying their loans.
A new version of HARP, dubbed HARP 2.0, was announced in late 2011 to try to address some of the original HARP's shortcomings, and Fannie Mae and Freddie Mac released guidelines on the new program in November.
If you're underwater and have a Fannie Mae or Freddie Mac loan in good standing, you may be able to refinance to a lower rate today. (You cannot get a HARP 2.0 refinance is you've already gotten a HARP refi under the old program, though.) Here's an overview of the HARP 2.0 changes.
With HARP 2.0, homeowners can go with any lender willing to refinance them -- and mortgage lenders should be more willing now than in the past to finance your home. Previously, mortgage lenders took a risk in refinancing underwater borrowers because Fannie and Freddie might force them to take back bad loans, but that's changed. In particular:
Another drawback to the first go-round of HARP was the fee structure. Risk-based surcharges increased the cost of refinancing to the point that the added costs often offset the savings significantly. Those fees have been lowered with HARP 2.0, particularly benefiting those who own homes in declining markets:
HARP 2.0 takes lenders off the hook in guaranteeing your income, liabilities and credit rating -- so it appears that HARP 2.0 could help homeowners refinance even if they have bad credit.
If you're interested in a refinance under HARP 2.0, read more about refinancing with bad credit and start the process to obtain lender quotes.
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