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Expanded HARP program can help homeowners
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Q: Regarding the HARP program, this is not for homeowners who are current with their mortgage payments and have successfully modified their home mortgage loans, right?
Have you any knowledge of any government programs in the near future regarding people who are underwater with their mortgages? Government should be working on help for us. (Have you) read or heard anything?
Thank you and continue your good work.
-- Mrs. Gamez, Las Vegas
A: The federal Home Affordable Refinance Program that you mentioned is certainly not a solution for every distressed homeowner here in Southern Nevada. But it is being expanded, and it might just be the best available government program many underwater homeowners have right now.
As President Barack Obama announced recently, and as one of his top housing officials explained during a visit to Las Vegas in January, HARP is being expanded in an attempt to help more homeowners who are underwater, or owe more on their mortgage than their home is worth.
We've known for months that the expanded HARP program is now open to investor-owned properties. However, homeowners who already refinanced under HARP can't do it again.
To better answer your question about whether homeowners who have already modified their mortgage can use HARP to do so again, I consulted Vickie Henry, a senior management analyst at the Department of Housing and Urban Development. She put it this way: "The guidelines provided by Fannie Mae and Freddie Mac are silent should a previous modification be a barrier to refinancing under HARP 2.0."
As for your question about "future programs for underwater mortgages," Henry added that "you may have heard President Obama during the State of the Union address (Jan. 24) announce a new refinance program for homeowners that are current and have been making their mortgage payments throughout the housing crisis.
HUD Secretary Shawn Donovan also spoke of the same new program during his visit to Las Vegas (Jan. 25), wherein he reiterated President Obama's announcement that the program details are to be published and publicly announced in the coming weeks.
At this time, we have not been advised of any specific details of this new program or the qualification requirements, but expect to be notified in the coming weeks."
Speaking to community leaders in Las Vegas last month, Donovan said a key part of this plan involves extending the 2009 HARP program.
The current refinancing program applies only to loans approved by Fannie Mae and Freddie Mac, but Donovan said Obama's new proposal would make the program available to an estimated 2 to 3 million U.S. homeowners with mortgages not guaranteed by these two government-backed entities.
The administration has suggested that fees on major banks could fund these initiatives.
In any case, my friends in the mortgage business say it's best to ask your mortgage servicer (the company that receives your mortgage payments) if it participates in HARP.
Not all mortgage servicers do. And contact Fannie Mae or Freddie Mac to determine if you're eligible for HARP, which has been scheduled to end on Dec. 31, 2013.
To refresh your memory, HARP was designed to help homeowners who bought during the housing boom but haven't been able to refinance because their homes aren't worth enough to secure a new mortgage through traditional refinancing.
The goal is to help homeowners avoid foreclosures by lowering their mortgage payments.
The original version of HARP allowed homeowners with mortgages backed by the federal loan agencies of Fannie Mae and Freddie Mac to refinance, but only if their new loans were no more than 125 percent of the current value of their home.
In Southern Nevada, where an estimated two of every three homeowners are now underwater, that wasn't much help.
A recent update to this program, or HARP 2.0, removed that loan-to-value restriction.
This can only increase the number of distressed homeowners who qualify. But it remains to be seen how many Nevadans might find some relief through this and other government programs.
For one thing, it's still not clear if the nation's biggest banks are going to participate in HARP.
A good online resource is making homeaffordable.gov.
To see if Freddie Mac owns your mortgage, visit freddiemac.com/mymortgage. To see if Fannie Mae owns your mortgage, visit fanniemae.com/loanlookup.
And if you simply can't afford your home, a short sale or "deed-in-lieu of foreclosure" may be your best option.
If you can't reach your lender, call a housing counselor certified by HUD at 800-569-4287 or visit hud.gov/offices/hsg/sfh/hcc/hcs.cfm to find one near you. They can help you contact and work with your lender, free of charge.
For more information about buying or selling homes and related issues, consult a qualified local Realtor or visit lasvegasrealtor.com.
Kolleen Kelley is the 2012 president of the Greater Las Vegas Association of Realtors and has worked in the real estate industry for more than 30 years. To ask her a question, email her at ask@glvar.org. For more information, visit lasvegasrealtor.com.
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The ONLY Borrowers with DAMAGES (lost money) are those who: (1) obtained conservative mortgages (<80% LTV) and (2) stayed current (never defaulted) despite being increasingly upside down due to the Borrowers who defaulted. Yet, the damaged borrowers are ignored and mocked. REFINANCING? Even with refinancing of debt that exceeds property value, the borrowers who defaulted may still win in the end as they are not upside down! To make matters worse, Government refinancing programs, such as HARP1, is financially HARMFUL to borrowers who must pay upfront FEES (non-refundable) and pay tens of thousands of dollars to resolve any gap btwn existing loan balance and refinance amount. HARP2 removes refinance limit, but the honorable borrower is still upside down (loan > property value)! GOVERNMENT GETTING RICH. Who ever follows where the restitution (shakedown) money goes? It is spread within Government as seen my the many secret millionaires in government. FLAW IN LAW. The foreclosure mediation law does not appear to require the defaulted borrower to pay any money into a trust acct until the "paper trail" dispute is resolved. The borrowers who default then squat for as long as possible and are enriched. This law has therefore caused further decline in real estate values and thus the economy. REAL SOLUTION IGNORED. Years ago, Govt programs should have reduced Principal in phases to borrowers who stayed Current (never defaulted) on mortgages obtained from 2004-2007 (high point of boom). That would have avoided most or all defaults and real estate values would have been more stable and thus the economy. ADS. radio ads now offer "credit restoration" to those with foreclosure or short sale on record. So the FICO system has no integrity? TV ads say STOP paying your mortgage if upside down. Those who pay their mortgages are mocked as fools.
You can forget about getting any help if you've paid your mortgage on an underwater house. Nobama's plans only helps those who do the wrong thing. He gets more votes that way.
If you're a homeowner with an adjustable-rate mortgage (ARM), you may choose to lock into a fixed rate if you anticipate rates will be going up soon, thereby stabilizing your monthly payments. I have used 123 Refinance to compare refi rates.