New HARP to help underwater homeownersPosted: Updated:
PHOENIX -- It's called the HARP 2.0 Program. It’s an upgrade and significant improvement from the original HARP Program which most experts agree was nearly a complete failure for homeowners.
HARP, you may recall, was initially launched by the Feds nearly three years ago and stands for Home Affordable Refinance Program.
Mike Metz is a home finance specialist here in the valley and says the original HARP Program had good intentions, but it failed miserably.
Metz tells 3 On Your Side, “In Phoenix I would say probably two-thirds of people who were calling me for the original HARP Program weren't able to qualify.”
So, how is HARP 2.0 any different this time around?
Well, for starters, there are no more loan to value limits.
For example, if someone took out a $200,000 loan a few years ago, but their home had depreciated and is now worth just $75,000, then they couldn't qualify under the original program because they were severely underwater.
But, under HARP 2.0, that old rule is out the window. That means homeowners who are underwater, which most are, can now refinance under record-low interest rates.
Metz says the new program is badly needed, saying, “People are really banking on this savings coming through for them.”
Metz says his office has more than 500 HARP applications already and is optimistic that stacks of paperwork will mean an average savings of $375.00 a month for homeowners.
“That’ll be after your taxes, over a $4,500 a year raise,” he says.
To qualify in Maricopa County, loan amounts have to be less than $417,000 and you had to have purchased your home before June 1, 2009.
Also, loans must be through Fannie Mae or Freddie Mac.
And finally, you have to have made your mortgage payments on time for the past six months.
Metz tells us he expects thousands of homeowners in the valley will qualify for HARP 2.0.
“Now that people have more money in their pocket, they're going to start spending more money. That should help the Phoenix economy,” Metz says.