Government Refinance Program is Revised
In order to try to stem the tide of foreclosures, the Obama administration put a program together called the Homes Affordable Refinance Program (HARP) in 2009. The goal was to help Anchorage homeowners and others who were underwater on their home loans (ie, owed more than what their home was worth) and struggling to make their monthly mortgage payments due to a current financial hardship get through this rough time without losing their home in the process. Unfortunately, with the restrictions that were in place with the original HARP guidelines, not as many homeowners were helped as was hoped for. The administration recently announced that they have made some revisions to this government refinance program in an effort to help more homeowners.
In the original program, Anchorage homeowners couldn't owe more than 125% of the value of their homes. This eliminated many people who bought their homes during the boom of a few years ago, when prices were rising at an alarming rate and before they began plummeting. Only properties that were the primary residence of the homeowners were allowed to try to refinance under HARP, which meant no investment properties were allowed. Also, homeowners were subject to certain fees when they converted their original 30 year mortgage loan into a shorter term (15 or 20 years mortgages). Homeowners had to pay for an appraisal when they wanted to refinance as well. The original program was set to end in June 2012.
With the new proposed plan, these restrictions are no longer in place. In order to qualify for the Homes Affordable Refinance Program under the current guidelines, Anchorage homeowners must:
- Have purchased their home through Fannie Mae or Freddie Mac before May 31, 2009.
- Be up-to-date on their mortgage payments, with no more than one late payment in the last 12 months and no late payments in the last six months.
- Have originally purchased the Anchorage home they wish to refinance as their primary residence, even if it is not currently the home they live in full-time.
- Never have used the HARP program previously to refinance their home (ie, you can't get refinancing under HARP more than once).
- Have a loan-to-value ratio of more than 80%.
If you are an Anchorage homeowner who is struggling to keep up with your monthly mortgage payment, you're not alone. HARP may be just what you need to help you get through this rough patch. And now, with the revisions this government refinance program has received, you may qualify for HARP.
Pauline Hofseth, your Anchorage real estate specialist
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