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Refinancing for underwater mortgages

As of March 17, 2012, a new program known as HARP or the Home Affordable Refinance Program has been introduced by the U.S. Government to help underwater homeowners. In order to qualify for the program, prospects need to meet two following criteria.

• Your loan must be backed by Fannie Mae or Freddie Mac, and
• Your current mortgage must have a securitization date prior to June 1, 2009.

If your current mortgage is backed by FHA, USDA, or a jumbo loan, you are not eligible for HARP. You can check whether your mortgage is backed by Fannie Mae or Freddie Mac by visiting www.fanniemae.com/loanlookup/ or www.freddiemac.com/corporate/. In addition to the above criteria, you also must meet several others. Your mortgage must be current; no late payments at least 11 of the most recent 12 months; and not used the program before. Keep in mind only one HARP refinance per mortgage is allowed.

HARP is not a mortgage forgiveness program nor is it a principle reduction program. It doesn’t allow cash out either. If you meet the above criteria, it doesn’t matter how much you are underwater. Under the HARP, there is no loan to value ratio. Investment properties do qualify for the program.