Are you being penalized for paying your mortgage on time?

Over the last couple of years that has been what I hear from several of the people that call me to refinance their current mortgages.  The sentiment is that they see people that fall behind or have other hardships be able to qualify for loan modifications where their mortgage balances, interest rates, and payments are lowered in efforts to help them keep their home.  Meanwhile, they have managed to keep up with their mortgage in an effort to maintain good credit but are repeatedly told they don’t qualify for a loan modification due to a lack of hardship or that they can’t refinance because they are too far upside down  on their mortgage.

Enter HARP 2.0.  HARP stands for Home Affordable Refinance Program.  The initial HARP was first introduced in 2009 by the Obama Administration to assist homeowners in refinancing during a declining housing market.  It was estimated that 5 million borrowers would benefit from this program, however, less than 900,000 people were able to take advantage.

Lack of awareness, coupled with the belief they would not qualify, has been partly responsible for this lackluster response, but more importantly has been the restrictions placed on the lenders and borrowers.  In an effort to address these issues, a new version labelled HARP 2.0 was introduced in March 2012.

One of the most significant changes has been the removal of the cap on how much money could be borrowed above the current market value of the home (these mortgages are commonly referred to as being “underwater”).  The revamped HARP program will allow the millions of people it was intended to help with realizing a dramatic savings on their monthly mortgage bill.  While there are some restrictions on who can qualify, most people with a federally backed Fannie Mae or Freddie Mac loan are going to be eligible.

Regardless of who you actually send your monthly mortgage payment to there is a very high probability the Fannie Mae or Freddie Mac is the technical owner of your mortgage.  If you want to see if you can benefit from this program, take a few minutes to contact us through our website, or call 978-575-3053.