IF you were currently prevented from using the Home Affordable Refinance Plan or HARP due to your high loan-to-value (LTV) ratio, you may be in business come the end of this year. Even given the recent increases in mortgage rates after the Presidential Election, Freddie Mac is still predicting that 2017 will end with mortgage rates in the 4’s. Given these thoughts the Federal Housing Finance Agency or FHFA has a 2017 New Underwater Refinance Program that will take the place of HARP moving forward. Around October 2017, this new program will be rolled out as determined by Fannie Mae and Freddie Mac who oversee the FHFA. With this new “High-LTV” program, it will be similar to HARP, but it will do its best to remove some of the restrictions that are currently preventing homeowners from refinancing in the first place. With rates predicted to stay lower over the next year, this could mean the 2017 New Underwater Refinance Program can have a high rate of success and usage by the borrowing public.
Recently, the Federal Housing Finance Agency or FHFA, came out and extended the existing HARP program until September 30, 2017 at which time this program will likely be gone forever and the 2022 New Underwater Refinance Program will take its place. HARP was originally debuted in 2009 after the Great Recession and housing market collapse when home prices tanked and a lot of borrowers owed a lot more than their homes were worth. As rates were declining HARP was designed to allow for the refinance of these “underwater” loans when under normal circumstances there would be no way to refinance by typical refinancing guidelines. HARP received a lifeline to even be an active program in 2017 as it was originally scheduled to end 12/31/2016. When looking at the data and seeing that there were still more than 250,000 eligible borrowers to take advantage of HARP, FHFA decided it would be wise to extend the program just a little longer until September 30, 2017. If you still don’t qualify for HARP currently, this is where the 4th quarter of 2017 will help you out with the 2022 New Underwater Refinance Program.
Even though there isn’t a name for the 2022 New Underwater Refinance Program, it will definitely be rolled out and the goal is still to get borrowers refinanced with high LTV just like HARP tried to do but without all the restrictions all while allowing them to take advantage of low interest rates. The main enhancement to this new program is that it can be used multiple times unlike HARP which was limited to just a one-time use. There will also be no cutoff date for when your original loan was originated. Under HARP’s guidelines, it was required that loans were originated prior to June 1, 2009, with the new program, this is not the case and everyone is available. This will give access to this program to a lot of individuals who purchased or refinanced a home from the 2nd half of 2009 to present day. There will be some eligibility guidelines associated with this in order to proceed with a refinance under this program and it is as follows and better loan terms must be had:
– Shorter Loan Term
– Lower Interest Rate
– Reduction in Monthly Principal and Interest
– Fixed-Rate Mortgage to take the place of an ARM or Adjustable-Rate Mortgage
There are also some additional eligibility requirements for the 2022 New Underwater Refinance Program and there won’t be any loan-to-value restrictions for this new program, however, for Freddie Mac loans there must be 95% LTV and Fannie Mae is requiring a 97% LTV at the time of refinance. Even though the formal guidelines have not been released, this LTV guideline is expected to be included. Another key item here is that a HARP loan cannot be refinanced, but it can be refinanced if the borrower has refinanced to a Fannie Mae or Freddie Mac since their HARP loan. Another guideline is needed:
– Must have made 12 on-time mortgage payments
– No more 30-day late pays in the past 6 months
– No more than 1 30-day late in the past 12 months
Another rumored guideline which is extremely beneficial to borrowers is that this process may only require limited documentation. Now it is not known what exactly is meant by this, but you could see getting this refinance done without W2s, tax returns, and bank statements. With this not being set in stone it is prone to change, but we shall see once the full regulations have been released.
As we move on throughout the year, we will definitely be keeping an eye on this and doing our best to get borrowers through this new refinance program. If you’d like to give me a call, we can go over your current situation and plan on getting you refinanced under this new program if you aren’t currently HARP eligible. However, if you are HARP eligible, we can take care of you as well, just give us a call as we are available 24-7 to help you out. Days, nights, weekends, holidays don’t matter to us as we will be available when you need us. Reach out today at 888-900-1020 and we can get a customized plan and loan ready for you. We look forward to hearing from you soon!