What is HARP 2.0?
HARP, or HARP 1.0 was originally established in 2009 as a way for homeowners who owed more on their homes then what they were valued at to refinance their high interest mortgages at lower more affordable interest rates. The government’s expectation in creating the HARP 1.0 program was that it would help millions of homeowners.
However, due to several restrictions, the HARP program fell well short of its goal in helping these homeowners refinance their homes. As a result, the Obama Administration and the U.S. Government reworked the program to ease its many restrictions. The results of which are now referred to as HARP 2.0.
The HARP 2.0 bill has now been extended until December 31, 2015. With HARP 2.0 homeowners with a loan-to-value ratio of more then 125% can now qualify – something that prevented a large number of homeowners from qualifying for the original HARP program. HARP 2.0 now only requires that the property value only have to be valued at less than the mortgage in order for homeowners to qualify.
More Lenders, More Homeowners
The original HARP program required that a homeowner’s mortgage be serviced by one of only a small and select list of banks. These banks included: Bank of America, Citigroup, Ally Financial, Wells Fargo and JPMorgan Chase. The updated HARP 2.0 program has lifted this restriction and is now available to all mortgage servicers.
It’s important to note that while HARP 2.0 makes it far easier for underwater homeowners to qualify for this program there are still a number of the original HARP program rules and restrictions that have remained in tact. The most import of these restrictions is that this program is still only available to Fannie Mae and Freddie Mac mortgages. In addition, underwater homeowners must be current with their mortgage and have had no record of late mortgage payments in the last 12 months. Homeowners that apply for this refinancing program must be able to prove that they can afford the new payments on their home.
Overall, the changes to the HARP 2.0 program are a welcome change. These changes should provide the assistance to millions of underwater homeowners. If your mortgage is more then your current homes value, you may be able to lower your current mortgage interest to a more affordable interest rate. To receive interest rate quotes and to learn more about the HARP 2.0 program please complete our rate quote request form today.
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