Loans.org Details HARP 2 Guidelines as the New Plan Goes into Effect

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While the original Home Affordable Refinance Program (HARP) failed, the new HARP 2 is poised to succeed. Loans.org offers an analysis of this new program and its requirements.

To inform underwater homeowners of a new refinancing option, Loans.org has published an article about the requirements borrowers must satisfy to qualify for the updated Home Affordable Refinance Program (HARP). The original HARP was far too restrictive, Loans.org says, and many of the nation’s struggling borrowers were unable to qualify for its help. The new HARP 2 program’s requirements, however, have undergone a complete overhaul and should prove to be of far more use to homeowners across the nation.

With the original program, homeowners were required to have a loan-to-value (LTV) ratio of 125 percent or less. But when the housing market collapsed, homeowners saw their LTVs skyrocket as a result of their severely depreciated property values. If somebody had an LTV of just 125 percent, they were considered fortunate.

HARP 2 has eliminated that 125 percent LTV ceiling on fixed-rate mortgage loans and should prove to be the help that homeowners have been looking for.

Some additional qualifications for HARP 2 are:

  •     Eligible home loans must be owned or guaranteed by Freddie Mac or Fannie Mae.
  •     Originators must have sold a borrower’s mortgage to Freddie Mac or Fannie Mae on or before May 31, 2009.
  •     The LTV must be higher than 80 percent.
  •     Payments on the mortgage must be current, with no late payment occurring in the past six months and no more than a single late payment in the past year.
  •     Finally, the loan in question must not have been refinanced through HARP already, unless the it was a Fannie Mae loan refinanced between March 2009 and May 2009.

Source: http://www.fhfa.gov/webfiles/22723/HARP%20release%20102411QandA%20Final.pdf

Lenders are beginning to offer HARP 2 refinances, and they should be available everywhere by the end of March 2012.

To learn more about refinancing under HARP and other borrowing issues, you can go to http://loans.org/mortgage to find a frequently updated library of financing information. Additionally, prospective applicants can access a free-to-use quote-comparison generator that is designed to help consumers receive the lowest interest rates possible.

To access the full article on HARP 2, readers can follow the “Articles” link at the top of any page on the site.

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Alex Gomory
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