The Federal Housing Finance Agency, together with Fannie Mae and Freddie Mac, have set up a bunch of updates to the HARP (Home Affordable Refinance Program).
The program has existed to help people who were in a position of negative equity but capped homeowners at 125% Loan-to-value. But now Homeowners can refinance without any limit on how upside down they are (i.e. limitless Loan-to-Value). The loans to be refinanced must have been sold to Fannie or Freddie on or before May 31, 2009 with current loan-to-value (LTV) ratios above 80 percent.
Here’s a summary of the most significant changes to the HARP program:
• Elimination of certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers;
• Removal of the current 125 percent LTV cap/limit for fixed-rate mortgages backed by Fannie Mae and Freddie Mac;
• Waiving certain representations and warranties that lenders commit to in making loans owned or guaranteed by Fannie Mae and Freddie Mac;
• Eliminating the need for a new property appraisal where there is a reliable A VM (automated valuation model) estimate provided by the Enterprises; and
• Extending the end date for HARP until Dec. 31, 2013 for loans originally sold to the Fannie or Freddie on or before May 31, 2009.
To see if your home loan is eligible, go grab the correct address at the Post office’s web site (to make sure you use the standardized address) then look it up at the Fannie Mae and Freddie Mac ‘Look Up’ addresses here. Fannie Mae Look Up Site or Freddie Mac Look Up Site
To download the full Federal document, click here