Refi Your Mortgage on Devalued Home with Harp 2.0

by Guest Writer Don Clark, LYC Mortgage LLC

On October 24, 2011, the Federal Housing Agency (FHA), together with Freddie Mac and Fannie Mae, issued a press release announcing a series of changes to the Home Affordable Refinance Program (HARP). This program is designed for homeowners that are current on their mortgage but have been unable to refinance because of their reduced home value. Finally, this program provides low risk borrowers the opportunity to capitalize on today’s record low mortgage rates.

Informally known as HARP 2.0, this new program updates and removes many of the previous regulations which kept good borrowers at bay. With HARP 2.0, homeowners who lost value in their home (pushing their loan-to-values over 80%) or who previously were obstructed from refinancing because of mortgage-insurance coverage requirements or condominium project approvals are now eligible for HARP refinancing.

While some restrictions still surround HARP 2.0, this is likely the only opportunity millions of homeowners living in devalued homes, with good credit and a solid payment history, have at refinancing their original mortgages. Also, with mortgage rates making history in the past month for shattering all-time lows, timing could not be more perfect. Unfortunately, this program will only be around for a limited time as it’s scheduled to expire in 2013.

To qualify for this program, general eligibility requirements require that the current mortgage be a conventional first lien owned or securitized by Freddie Mac or Fannie Mae and has been owned by them prior to May 31, 2009. That would mean that your mortgage had to be obtained prior to that date to qualify.

If this situation applies to you, the first step is to determine if your mortgage is owned or securitized by Freddie Mac or Fannie Mae . If you are unsure, you can check both Fannie Mae and Freddie Mac’s websites or you can call their toll-free number for confirmation.

A short HARP eligibly questionnaire is available by contacting LYC Mortgage by email or phone (781-303-2620). If your home has decreased in value, this might be your only option to refinance with mortgages at today’s historically low rates. Don’t miss out.

This article was provided by Don Clark at LYC Mortgage LLC, headquartered in Wellesley, MA. To contact Don Clark directly, please call 781-303-2620 or email dclark@lyccpa.com. You should also check out LYC’s state licenses before contacting them.

About Andrew Schwartz, CPA

Andrew D. Schwartz, CPA, is a partner with Schwartz & Schwartz, PC, and the founder of The MDTAXES Network.
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