Revamped HARP Program: Trick or Treat for Underwater Florida Homeowners
Haunted homeowners finally got some good news this week when the White House announced the re-launching of its 2009 Home Affordable Refinance Program (HARP). Rising from the dead, the revitalized program features some key costume changes designed to revive the program and help underwater mortgage owners take advantage of today’s low mortgage rates to lower their monthly payments and reduce their loan amount.
Out of the 4 million mortgages in Florida, about 1.25 million are underwater. Although HARP was released two years ago to help 5 million struggling homeowners nationwide, only a very small percentage were able to take advantage of it. The revisions in the program focus on increasing the number of eligible “not so scary” loans.
But Oppenheim Law’s Florida Real Estate Attorney and Legal Blogger Roy Oppenheim calls the revised program too little too late.
“The reality is the government says it’s going to help a million people but ten million people need help and they are not getting help. So many people have had to default and destroy their credit because the government never really came to bail out the homeowners. Instead, they sold out the homeowners and bailed out the banks,” Oppenheim told WSVN TV.
The New Program Requirements: Trick or Treat?
Homeowners are required to be current on their loans and cannot have missed any payments in the previous six-month period. Unfortunately, this means many struggling homeowners still will not qualify for relief under the program.
Other requirements include:
* Loans must be backed by Fannie Mae or Freddy Mac
* Continue to make mortgage payments on time
* Loan to value ratio greater than 80%
* Cannot have previous refinanced under the program
* No missed payments in last 6 months, no more than 1 missed payment in previous 12 months
The new plan bypasses the 20% equity requirement and the 125% underwater cap has been lifted. Title and insurance fees have also been dropped.
The federal government wants to have the program up and running by December, so now is the time for homeowners to approach their lenders about whether they qualify and to file their paperwork.
So call your mortgage company and see if the new program is a trick or treat. Don’t be upset if it’s a trick… after all it’s Halloween!