Hope for 120k Underwater Homeowners in Missouri With Updated Obama Refinance Program HARP 2.0

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Hometown Mortgage LLC, a Missouri HARP Mortgage Lender, reports that recent updates made to the Home Affordable Refinance Program HARP 2.0 may help Missouri homeowners who are living in homes valued at an estimated $4.88 billion with negative equity by allowing them to refinance and take advantage of lower interest rates.

Missouri HARP Lenders

New legislation to help underwater homeowners in Missouri

Up to 90% of new HARP 2.0 applicants being approved today were previously denied for a refinance under the original HARP program.

Missouri HARP 2.0 mortgage lenders refinanced 2,990 (2.4%) of the state’s estimated 120,000 Fannie Mae or Freddie Mac underwater mortgages, according to the Federal Housing Finance Agency’s (FHFA) most recent 2012 Refinance Report.

Even though the HARP eligibility updates removed the caps on how far underwater a mortgage can be, only 15 of those Missouri HARP Refinances completed year-to-date were for mortgages that had a Loan-to-Value (LTV) of 125% or more.

CLICK HERE - to check HARP loan eligibility through Fannie Mae or Freddie Mac.

While the Mortgage Bankers Association estimates that HARP refinances are accounted for an average of 23% of all refinances in June 2012, many Missouri borrowers are unaware of recent changes made to the Home Affordable Refinance Program that was initially launched in March 2009 by the Obama Administration.

“We’re astonished that up to 90% of the HARP 2.0 applications our office is receiving are from borrowers who were previously denied a refinance under the first Home Affordable Refinance Program,” states Susan Waugh, broker of Hometown Mortgage in Missouri.

There have been many positive changes to the original HARP refinance program that have helped streamline the HARP underwriting process, allowing more people to take advantage historically low interest rates.

Susan Waugh lists appraisal waivers, mortgage insurance barriers and unlimited loan-to-value caps among the top roadblocks that were removed with the new changes to HARP, which went into effect for all participating brokers and bankers in early 2012.

Help for MO homeowners is definitely needed for many that purchased at the peak of the housing boom. According to a Harvard University Joint Center for Housing Studies report ”The State of the Nation’s Housing,” the level of house payment to household income was over 53% higher for loans originated in 2006 as compared to 2011.

Another report from Harvard, “A Model of Mortgage Default”, indicates that the probability of a homeowner defaulting on a loan increases when their ability to borrow is constrained when combined with negative equity. HARP is designed to prevent default by helping underwater homeowners refinance into a lower interest rate and/or mortgage payment.

HARP 2.0 Overview:

In October 2011, the Federal Housing Finance Agency (FHFA), Fannie Mae, and Freddie Mac announced enhancements to the Home Affordable Refinance Program that make it easier for lenders to refinance HARP-eligible mortgages.

The Home Affordable Refinance Program (HARP) is a streamline refinance program created to help responsible borrowers who have continued to make their mortgage payments, but may be unable to refinance over recent years due to a decline in their home value.

The Obama administration claims that HARP will save homeowners an average of $250 a month in mortgage payments, and that the Home Affordable Refinance Program overall will help an anticipated 4-5 million underwater homeowners.

To be eligible for HARP 2.0, borrowers need to meet the following requirements:

1) Their first mortgage loan is owned or guaranteed by Fannie Mae or Freddie Mac.
2) The loan was sold to Fannie Mae or Freddie Mac before May 31, 2009.
3) They have to be current on their mortgage payments.
4) Must owe more than your home is worth, or is there minimal equity in your home.
5) All mortgage payments made on time in the last 6 months.
6) No sixty (60) day late payments in the past 12 months.

Contact Susan Waugh at 314-669-6964 or visit her HARP website at http://missouri.harpmortgagelender.com/ for more information about qualifying for the Home Affordable Refinance Program.

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Raymond Bartreau
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