Fred Van Allen of First Team Real Estate of Los Angeles is a leading authority when it comes to making smart housing investments. In this article, he shares some insider advice on the HARP Program, what it is and who can benefit from this initiative.
The Home Affordable Refinance Program (HARP) is a program initiated by the Federal Housing Finance Agency in March 2009 with the objective of allowing underwater and near-underwater homeowners the opportunity to refinance their mortgages. An underwater mortgage will often depreciate the value of a property to the point that traditional refinancing solutions are no longer available to the homeowner. In these cases, the HARP program is often the only option for refinancing.
According to the official HARP website, 9 out of 10 homeowners that could qualify for this program never apply. A few theories abound as to why the program is not getting more traction. One of those is that people simply do not know about it. This could be attributed to many real estate or mortgage professionals not being aware of the details of the program. Or it could be that the criteria necessary to qualify for the program could be considered rather daunting.
When asked about this criteria, Van Allen points out, “The details behind this program are somewhat complicated and not everyone qualifies for this initiative. Very basically, the criteria for qualification includes someone who has tried traditional refinancing but has been unable to qualify. The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae. The mortgage must have been sold to Fannie Mae or Freddy 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 the HARP from March to May, 2009.”
For homeowners not familiar with Fannie Mae or Freddy Mac, these are the two major entities that back the majority of the mortgages in the United States. Since neither company deals directly with the public it is advised that homeowners check the respective databases or call the consumer help lines available on each company’s website to determine who backs the homeowner’s mortgage.
Van Allen continues with outlining the criteria a homeowner must meet to participate in this program, “The current loan-to-value (LTV) ratio must be greater than 80%. Finally, the borrower must be current on the mortgage at the time of refinance, with a good payment history over the previous 12 month period.”
When asked if Van Allen had any suggestions or advice for homeowner that may qualify to take advantage of the HARP program, he replied, “Ask your mortgage servicer if they participate in HARP or call a real estate loan expert.”
For more information about the HARP program or to learn more about Fred Van Allen, Realtor please visit http://www.linkedin.com/in/fredvanallen or call his team at (909) 261-9711.