Marc Guzman's West County Blog

Marc Guzman is the Technology Manager and a Broker-Associate at Security Pacific Real Estate (Lic# 01397719) in West Contra Costa County of Northern California. Currently specializing in residential sales in the Bay Area and responsible for over 800 transactions since 2003. To subscribe to my blog, click 'Follow on Tumblr' at the top of the page or sign up for the RSS Feed. For past articles, enjoy the easy navigation in the 'Archives' or use the Search option below. Enjoy!

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Just Released! HARP Allows Underwater Homeowners to Refinance!

On Monday, October 24th, it was announced by the Federal Housing Finance Agency (FHFA) that they have changed the rules to the Home Affordable Refinance Program (HARP). The new rules are designed to double, maybe even triple, the number of underwater homeowners it can help.

So What is HARP?

The Home Affordable Refinance Program began in 2009 to allow underwater borrowers the ability to refinance their mortgage if their loan was backed by, or sold to, Fannie Mae or Freddie Mac prior to May 31st, 2009. It was a great concept but there was a limit of 125% loan-to-value. Meaning if you were underwater by more than 25%, then you did not qualify. Well, we all knew that the majority of the homes at risk were underwater by more than 25%; some areas in West Contra Costa County were around 80-90% underwater. So this limited the program to assisting approximately 1 million homeowners.

So What Are The Changes?

The biggest change is the removal of the 125% loan-to-value ceiling. This is a HUGE help to many underwater homeowners and will allow a big portion of them to refinance at today’s crazy-low interest rates.

Another big change is the extension of the program. Originally it was designed to end on June 30, 2012 but now has been extended to end on December 31, 2013. There are other minor changes such as fees and the requirement of a new property appraisal. Fannie Mae and Freddie Mac have been working on a new Automated Valuation Model (AVM).

Do I Qualify for HARP?

There are several qualifications for HARP but here are the three main qualifications:

Your loan has to be backed or have been sold to Fannie Mae or Freddie Mac prior to May 31, 2009.
You MUST be current on your mortgage without a late payment in the last 6 months, and no more than 1 late payment in the last 12 months
Your loan-to-value ratio MUST be at least 80%; there is no ceiling cap as of December 1, 2011.

If you have any questions as to whether your loan is owned or backed by Fannie Mae or Freddie Mac, here are the links to look it up:

Fannie Mae: http://www.fanniemae.com/loanlookup/
Freddie Mac: https://ww3.freddiemac.com/corporate/

Applications for HARP’s new changes will begin December 1, 2011. If anyone has further questions, leave a comment and I’d be more than happy to help.

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