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By Joanne Bernardini | Agent in Linwood, NJ
  • Help For Homeowners That Need to Refinance but are “Underwater”

    Posted Under: Financing, Foreclosure, How To...  |  January 19, 2012 8:27 AM  |  1,276 views  |  1 comment

    Many homeowners across America are current on their mortgage payments but are struggling. Mortgage rates have dropped to historically low figures and yet owners are stuck in mortgages with higher rates because they can’t refinance. The kink in the process comes because property values in an area have fallen. The appraiser reports a lower value on the property than what is owed on the current mortgage and the refinance request is denied. The property owner is then unable to take advantage of the newer, lower mortgage rate.


    For homeowners that are fortunate to have mortgages owned or guaranteed by Freddie Mac or Fannie Mae help is available! The newly expanded Home Affordable Refinance Program (HARP) is designed to help you get a new, more affordable, more stable mortgage. HARP refinance loans require a loan application and underwriting process, and refinance fees will apply.


    Not sure if your mortgage loan is owned by Freddie Mac or Fanny Mae? You can find out very easily by contacting them.

    Fannie Mae

    Call 1-800-7FANNIE (8 am to 8 pm EST)

    Online at www.fanniemae.com/lookup


    Freddie Mac

    Call 1-800 FREDDIE (8am-8pm EST)

    Online www.freddiemac.com/mymortgage


    Lots of information is available on the program site:



    If you need help the first step is to contact the HUD-approved housing counselors. They are available to help you understand your options, plan a course of action and submit an application. No cost assistance (in 160 languages) is available around the clock by calling them at 888-995-HOPE (4673).

    According to their website, you may be eligible for HARP if you meet all of the following criteria:

    •               The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.

    •               The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.

    •               The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.

    •               The current loan-to-value (LTV) ratio must be greater than 80%.

    •               The borrower must be current on the mortgage at the time of the refinance, with a good payment history in the past 12 months.

    *Eligibility criteria are for guidance only. Contact your mortgage servicer to see if you are eligible for HARP.


    If your mortgage is owned or serviced by a lender other than Freddie Mac or Fannie Mae, there still may be help available if your lender participates in the FHA Refinance for Borrowers with Negative Equity (FHA Short Refinance). If your current lender agrees to participate in this refinance program, they will be required to reduce the amount you owe on your first mortgage to no more than 97.75 percent of your home's current value. Not all lenders participate but it certainly worth a call to them to ask!

    You may be eligible for FHA Short Refinance if you meet the following criteria:

    •               Your mortgage is not owned or guaranteed by Fannie Mae, Freddie Mac, FHA, VA or USDA.

    •               You owe more than your home is worth.

    •               You are current on your mortgage payments.

    •               You occupy the house as your primary residence.

    •               You are eligible for the new loan under standard FHA underwriting requirements.

    •               Your total debt does not exceed 55 percent of your monthly gross income.

    •               You must not have been convicted within the last 10 years of felony larceny, theft, fraud, forgery, money laundering or tax evasion in connection with a mortgage or real estate transaction.

    *Eligibility criteria are for guidance only. Contact your mortgage servicer to see if you are eligible for FHA Short Refinance and FHA2LP.

    If you have questions questions about FHA Short Refinance, contact the FHA National Servicing Center at (877) 622-8525 or HUD.gov/offices/hsg/sfh/nsc/nschome.cfm








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