Obama’s revised HARP program: what does it mean -- and who stands to benefit?

By John R. Lefferdink

Last month, President Obama rolled out a revised version of the Home Affordable Refinance Program (HARP) in an attempt to aid underwater property owners struggling to refinance their homes. Under the original HARP program, borrowers with a first mortgage balance exceeding 125% of their home’s current value were entitled to lower mortgage rates. However, according to the

Chicago Tribune

, the program has failed miserably amidst the current housing crisis; and now, the Obama administration is attempting to help a broader percentage of underwater homeowners by extending and adjusting the scope of the initiative.

Under the revamped HARP program, qualification will now be extended to homeowners who:

  • Possess an existing mortgage that was sold to Fannie Mae or Freddie Mac on or before May 31, 2009
  • Have made on-time mortgage payments for at least 6 months prior to applying without missing more than one payment within the past year
  • Are not in bankruptcy or foreclosure

In addition, program revisions will eliminate appraisal requirements in most cases, and may also permit second homes or properties to qualify for a refinance provided those properties encompass no more than four units and can be classified as single-family homes, condos or co-ops.

Prior to the Obama administration’s decision to extend HARP, the program was set to expire as of 2012. Now, however, HARP has been extended through December 31, 2013, and will, according to the president, be modified for increased efficiency in order to provide maximum aid to struggling homeowners. But despite participation agreements from the four largest mortgage companies in the nation – Chase, CitiMortgage, Bank of America and Wells Fargo – the fact remains that involvement in the revised HARP initiative is not only voluntary, but also subject to alteration by those banks who do opt in to the program. All this leaves homeowners in something of a bind when it comes to understanding the specifics of the HARP program at their individual banks, and whether or not they qualify; and as for the banks themselves, there are plenty of reasons why they might want to participate while simultaneously denying benefits to those most in need.

Expert resources for struggling homeowners at Prudential California Realty, Rancho Santa Fe

Amidst a climate of economic uncertainty and market instability, it can be difficult for homeowners to navigate the changing face of the lending process on their own. As a highly successful real estate professional with over 35 years of industry experience, I strongly encourage anyone considering a loan under the current HARP program to first take the following steps:

  • Determine if you have a Fannie May or Freddie Mac loan by going online to www.FannieMae.com/loanlookup or www.FreddieMac.com/corporate
  • Contact your existing lender, or find a mortgage lender where HARP refinancing is available
  • Consult a seasoned real estate advisor to answer any question you may have about the program, and to determine the best course of action and ensure the greatest financial security for the long haul.

At Prudential California Realty in Rancho Santa Fe, our diverse team of exceptional agents and advisors with

John Lefferdink & Associates

operate under a firm commitment to client satisfaction – and we look forward to helping San Diego homeowners make the right choices for the future. To learn more, visit

www.johnlefferdink.com

to view both the

FHFA News Release

and the

HARP Phase II Q&A list

  1. You can also reach us by calling (619) 813-8222 to schedule a consultation.
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