Housing help or hype?Posted: Updated:
PHOENIX -- When they moved into their Maricopa home back in 2006, Stephanie Nobert and her husband put down $100,000.
Since then, home values in their neighborhood have hit rock bottom. Most people in this area are 65 percent to 70 percent underwater.
“We’re not getting any younger,” Nobert said, “We’re 55 – and we still have another good 10 years to work. But it’s time you start thinking … how much more can I put in?”
For the past year, she says, they’ve been searching for the right answer.
“About a year ago I said to my husband, 'Maybe Obama will let everybody refinance.'”
This week President Obama announced details of the revamped HARP or Home Affordable Refinance Program.
The Administration says the aim is to help homeowners like the Noberts take advantage of record-low rates.
Dean Wegner, a Valley mortgage broker with Guarateed Rate said, “Within the last 45 days we’ve hit the second lowest rate in history – just within the last 45 days.”
Wegner is trying to help the Noberts take advantage of those rates and refinance their loan with Wells Fargo Bank.
He said the biggest change to the government’s housing help program is that it no longer requires an appraisal.
So, people deeply underwater – like Stephanie Nobert – can still qualify if the banks give the green light. And that is still a big if.
“I think banks are a little conservative in their approach to HARP 2,” Wegner said, “but I think as months go on and more information is passed along about how the initial loans are performing – I think it will loosen up and it will be everything we want it to be.”
Wegner said he is cautiously optimistic. If more banks see people making good on their loans, there might be incentive to let qualified homeowners refinance.
The HARP 2 announcement comes amid a week of mixed housing news that showed a market with signs of recovery but still deeply in turmoil.
The pace of new-home sales fell last month even as prices jumped to their highest level since June, according to figures released Friday by the Commerce Department.
So where does all of this leave homeowners like Stephanie Nobert? She and her husband represent all of the people who have continued to make payments on time – no matter what.
“I was so excited,” she said.
Nobert believes this new government program offers some light at the end of the tunnel.
While the thought of just walking away has crossed their minds, the Noberts are hopeful that the revamped HARP program will make it possible for them to stay in the house they love.
“This will really help because we just want to stay here – until things come back.”
Here is more information from Wegner on HARP 2:
What Is HARP?
HARP was started in April 2009. It goes by several names. The government calls it HARP, as in Home Affordable Refinance Program. The program is also known as the Making Home Affordable plan, the Obama Refi plan, DU Refi +, and Relief Refinance.
In order to be eligible for the HARP refinance program :
1. Your loan must be backed by Fannie Mae or Freddie Mac.
2. Your current mortgage must have a securitization date prior to June 1, 2009
If you meet these two criteria, you may be HARP-eligible. If your mortgage is FHA, USDA or a jumbo mortgage, you are not HARP-eligible.
HARP : Questions and Answers
Do these question-and-answers account for the "new" HARP mortgage program?
Yes, everything you are reading is accurate as of today, February 13, 2012. This post includes the latest changes as rolled out by the Federal Home Finance Agency on October 24, 2011, and as confirmed by Fannie Mae and Freddie Mac on November 15, 2011.
Is "HARP" the same thing as the government's "Making Home Affordable" program?
Yes, the names HARP and Making Home Affordable are interchangeable.
How do I know if Fannie Mae or Freddie Mac has my mortgage?
Fannie Mae and Freddie Mac have "lookup" forms on their respective websites. Check Fannie Mae's first because Fannie Mae's market share is larger. If no match is found, then check Freddie Mac. Your loan must appear on one of these two sites to be eligible for HARP.
If my mortgage is held by Fannie Mae or Freddie Mac, am I instantly-eligible for the Home Affordable Refinance Program?
No. There is a series of criteria. Having your mortgage held by Fannie or Freddie is just a pre-qualifier.
My mortgage is held by Fannie/Freddie. Now what do I do?
Find a recent mortgage statement and write "Fannie Mae" or "Freddie Mac" on it -- whichever group backs your home loan -- so you don't forget. Give that information to your lender when you apply for your HARP refinance.
What if neither Fannie Mae nor Freddie Mac has a record of my mortgage?
If neither Fannie nor Freddie has record of your mortgage, your loan is HARP-ineligible. However, you may still be eligible for a "regular" refinance to lower rates.
Does HARP work the same with Fannie Mae as with Freddie Mac?
Yes, for the most part, the HARP mortgage program is the same with Fannie Mae as with Freddie Mac. There are some small differences, but they affect just a tiny, tiny portion of the general population. For everyone else, the guidelines work the same.
Am I eligible for the Home Affordable Refinance Program if I'm behind on my mortgage?
No. You must be current on your mortgage to refinance via HARP.
Will the Home Affordable Refinance Program help me avoid foreclosure?
No. The Home Affordable Refinance Program is not designed to delay, or stop, foreclosures. It's meant to give homeowners who are current on their mortgages, and who have lost home equity, a chance to refinance at today's low mortgage rates.
What are the minimum requirements to be HARP-eligible?
First, your home loan must be paid on-time for the prior 6 months, and at least 11 of the most recent 12 months. Second, your mortgage must have been sold to Fannie or Freddie prior to June 1, 2009. And, third, you may not have used the HARP mortgage program before -- only one HARP refinance per mortgage is allowed.
If I refinanced with HARP a few years ago, can I use it again for HARP II?
No. You can only use the HARP mortgage program one time per home.
Is there a loan-to-value restriction for HARP?
Depends for now, until more banks catch on you could still be limited to 125%. If your mortgage is held by one of the 3 banks that service about 50% of home loans you have a better chance. Be prepared to wait a very long time for processing like 90 - 150 days. In addition rates will vary greatly from lender to lender.