Mortgage rates remain historically low
A considerable amount of positive feedback is coming from homeowners who have refinanced through the Obama Administration’s new HARP 2.0 program. This innovative program enables homeowners to refinance their mortgage to a much lower interest rate while using a less restrictive set of underwriting guidelines. Millions of homeowners can still qualify for a refinance under the new HARP 2.0 program.
For the uninitiated, the Obama Administration announced the Home Affordable Refinance Program, otherwise known as “HARP”, in 2009. The initial results were encouraging, so the HARP program was expanded in 2011 to include larger groups of homeowners, such as those who had been making their mortgage payments but whose credit profile had changed, or for those families whose homes had declined in value. Almost overnight, thousands of homeowners began taking advantage of the new guidelines and “HARP 2.0” was born.
Getting the word out to the public about the new HARP 2.0 guidelines still remains a big challenge, but the tide is turning. Many eligible homeowners are starting to realize how much HARP 2.0 could help them. To give you a sense of how HARP 2.0 has been such a game-changer, the following is a typical HARP 2.0 conversation between a loan officer and a homeowner:
Loan Officer: To determine if you qualify for the HARP 2.0 program, we just need to ask you a few questions. First, was your current loan closed prior to May 31, 2009?
Homeowner: Yes, I believe it was.
Loan Officer: Excellent. Are you currently employed full-time?
Homeowner: Yes, I am employed full-time.
Loan Officer: Ok, that’s great. The next two questions pertain to your recent mortgage payment history. Have you had any late payments on your mortgage in the last 6 months?
Homeowner: No. I have made all of my mortgage payments on time within the past six months.
Loan Officer: Sounds good. Have you had more than one late payment on your mortgage within the past 12 months?
Homeowner: No. We did make one late payment last January, but that’s been all.
Loan Officer: That’s just fine. HARP 2.0 guidelines allow borrowers who have made one late payment within the past 12 months to qualify.
The next step is to determine whether your current loan was originated through a Fannie Mae or Freddie Mac loan program. For your information, Fannie Mae and Freddie Mac are the two government-sponsored enterprises that fund a large portion of home loans in America.
You can verify whether your current loan is a Fannie Mae loan or Freddie Mac loan a number of ways. First, you can check your closing documents, as many of those documents will reference Fannie Mae or Freddie Mac.
Second, Fannie Mae and Freddie Mac have websites with easy search engines which we can check together. Fannie Mae’s website is https://www.knowyouroptions.com/loanlookup. If your current loan is not a Fannie Mae-owned loan, then we’ll need to check Freddie Mac’s website at https://ww3.freddiemac.com/corporate/?intcmp=LLT-HPstep1. If either one of these websites verify that they own the loan and the loan was purchased prior to May 31, 2009, your chances of being able to refinance are very good.
Homeowner: That’s great. Let’s check those websites.
Loan Officer: Good news! Your loan appears to be a Fannie Mae loan that was closed prior to May 31, 2009. Let’s review your current loan to see how much money we can save you.
Please note that, depending on your own financial situation, there may be other qualifying requirements for HARP 2.0 that could affect your eligibility. However, the above conversation gives you a sense of just how much HARP 2.0 differs from a traditional refinance and why millions of homeowners have been helped. To find out if you qualify for HARP 2.0, contact one of James B. Nutter & Company’s licensed, non-commissioned loan officers at (800) 217-7334 for more information. You can also research the HARP 2.0 program at www.makinghomeaffordable.com.