Brought in back in 2009 by the federal government, the Home Affordable Refinance Program, or HARP was designed to assist those individuals or families having a rough go of managing their mortgages in these tough economic times. The HARP essentially allows qualified homeowners to refinance their mortgages with the idea of coming up with better terms and lower, more manageable payments.
Who Can Qualify for HARP?
According to the Federal Housing Finance Agency, to qualify for the Home Affordable Refinance Program (HARP), you must;
- First and foremost, your mortgage must be owned by Freddie Mac or Fannie Mae and must have started on or before the date of May 31, 2009.
- Your mortgage must be current and up to date. You cannot have had any late payments in the last 6 months and no more than one in the last year.
- The home in question must be your primary residence, a one unit second home or a one to four unit investment property.
- Your current loan-to-value or LTV ratio must be greater than 80%.
Who’s Missing Out and Why?
It would appear more and more people are becoming overly sceptical about offers to save them money or incentives to help them manage their financial affairs better. This of course, due to the ever increasing scams coming at us from those who abuse both the internet and the telephone. Quite often targeting those most vulnerable in our society. This well founded lack of trust by consumers, is unfortunately, believed to be one of the main reasons thousands of people are missing out of the benefits that are there for the taking through HARP. It has been estimated that just about 800,000 qualified homeowners in the United States are missing out on the Home Affordable Refinance Program. On average, that is about a $200 a month savings per qualified homeowner.
Another Possible Factor for Not Taking Advantage
It is very possible that some of these 800,000 consumers have applied for HARP but found themselves, at the time of application, not qualified or denied for any number of reasons. As a result, many of these consumers may believe they are not able to re-apply or still don’t qualify.
Like many new programs implemented by both government and private organizations, a little tweaking is usually required to the program after a short trial period. It was found after the first couple of years HARP was running that the qualifying rules were excluding a good number of applicants. As a result, updates were made to the program which can overturn many of those decisions previously made denying applicants the benefits of the Home Affordable Refinance Program. Some of the changes made to the program include the following;
- Extended Application Deadline: For those that have been previously denied and for those that have yet to apply, the deadline to receive the benefits of HARP has been extended to December 31, 2015.
- No Appraisals or Underwriting: In most cases, the homeowners will not be required to have a property appraisal completed or have their loan underwritten. This will definitely speed up the process of refinancing.
- No Underwater Limits: Loan-to value (LTV) limits were previously set at 125%. With the new changes, regardless of how far the home has fallen in value, qualified borrowers will be able to refinance.
- Less Paperwork: A lender now has the option to qualify a borrower just by documenting he or she has at least twelve months of mortgage payments in reserve. Lenders will also not require so much paperwork verifying a borrower’s income.
- Modified Fees: Some risk based fees for borrowers who refinance into shorter term loans have been reduced.
Protecting Yourself From The Scams
If you receive a telephone call from anyone claiming to represent a government agency, they should have no problem at all providing you with information regarding whatever program they are trying to inform you about. As a practice, when you receive a telephone call from anyone claiming to save you money or help you manage your current financial situation, adhere to the following steps;
- Never provide them with any personal information at any time during your call.
- Ask for the name of the person calling and a phone number which they can be reached at.
- Ask them to verify the name of the program they are providing information for, what, if any agency is sponsoring the program.
- Ask for a mailing address as well as the website URL for the company or agency they are representing.
Take similar precautions from any email you may receive claiming to save the day. From the information you gather from your own inquiries, conduct more research. Call the numbers you receive and talk to others. Check out websites and reviews of the programs. The more information you have, the better decisions you can make.