More Relief for Underwater Homeowners

chicago new home loan refinancingChicago new homes owners who are struggling with mortgages worth more than the value of their homes may soon receive some assistance from the Home Affordable Refinance Program also known as HARP.
HARP was originally established in 2009 to assist homeowners with Fannie Mae or Freddie Mac loans who are current on their mortgage payments, but cannot refinance their home due to declining real estate values that have caused their home’s mortgage to be higher than its current value
At the end of 2012, HARP changed their requirements, and will now allow  refinancing for more people. The first model of the program allowed homeowners to refinance up to 125 percent loan to value, which means that a homeowner who owed $125,000 on a $100,000 house would be eligible for assistance. Under the new model, homeowners are eligible to refinance up to 200 percent loan to value. This means that if your home is currently worth $150,000, you would be eligible to refinance an existing mortgage of up to $300,000 to today’s lower fixed rate.
Homeowners who wish to qualify for HARP need to have been on time with their mortgage payments, making no more than one late payment per year, and also need to have less than 20 percent equity on their home. The program is designed for homeowners with Fannie and Freddie Mac loans only. Homeowners with Jumbo loans may see an opportunity for relief at the end of 2013 with the anticipated release of a modified program to address holders of these larger mortgages.