Posts Tagged ‘harp refi program’

Need HARP or HAMP? See Eligibility Requirements For 2011

Eligible For HARP or HAMP Requirements

HARP or HAMP? Are you eligible? What are the HAMP or HARP requirements for 2011? Millions of homeowners are struggling to survive financially after the 2008 depression. Their home value have declined deeply and many have lost their jobs, sending them a one way ticket to foreclosure. The Obama administration has issues some programs intended to help these homeowners, but far too many of them at 2011 do not know whether they are eligible for the HARP or HAMP requirements.

HARP (Home Affordable Refinance Program) and HAMP (Home Affordable Modification Program) are two programs made as part of the Homeowner Affordable and Stability Plan (HASP) their main porpoise is to help homeowners in poor financial situations a financial life-jacket. Both programs are aiming to help the people who have underwater refinancing needs. “Underwater” means that their current mortgage is much higher than the house value, this happened because after the subprime disaster of 2008/9 houses value plunged deeply.

For example a homeowner takes a mortgage at 2007 for a house value of $150,000, now at 2011 the home market value is $100,ooo, and the mortgage is $120,ooo. The loan to value factor (LTV) is 120%. This is an unstable situation where the mortgage loan is much higher than the market value of the property, because it is risky for the homeowner and the lender too. These kind of mortgages with negative equity are held by millions of households, it is estimated that 25% of the mortgage market are underwater!

HARP Refinancing Program Requirements

The HARP was extended until June 30 2011. Basically many see this refinancing program as a failure, because it was used by a small percentage of the homeowners it was meant to help. As little as 709,900 refinances were done through this program, which is disappointing compared to the millions of borrowers it was intended to serve. The HARP assistance program is for people who are NOT in danger of foreclosure.

The eligibility to join HARP is to meet these requirements:

1. 1 Year Homeowner Occupied – The homeowner must occupy the eligible property for at least 12 month before applying to the HARP assistance program.
2. Must Be Individual/s – The HARP does not support cooperation, companies, partnerships or any other non individual legal identities. The homeowner qualifying must be a person.
3. Must Be Current On Mortgage – Since the refinancing process means getting a new one in new terms, the lenders need to see you are a good customer, this means not being behind on any mortgage payment in the last year.
4. 30 Days Deadline - You must not be late on any mortgage payment by over than 30 days.
5. Loan To Value Ratio – To qualify for the HARP assistance plan your LTV must be below 125%. You may be underwater, but you should not be at the ‘bottom of the sea’ to be qualified.
6. Freddie or Frannie – The mortgage you currently have needs to be backed by Frannie Mae or Freddie Mac to qualify. If you are unsure if whether your mortgage belongs to either of them check at the making home affordable (MHA).

HAMP Mortgage Modification Requirements

The HAMP modification program has a different set of requirements as this program is meant to help people who suffer a decline in income together with a upside down mortgage (underwater).

The HAMP modification program has three stages, the first stage is the qualification process, when the homeowner has to meet the minimum requirements as followed below, the second stage is a trial test, to to be current on the new mortgage for 90 days, only then the new mortgage terms become permanent.

For the first stage HUD has specific HAMP eligibility requirements:

1. Front End Debt To Income Ration Of 31% – The ‘front end’ debt to income ratio is a measurement of how much of the gross income (before taxes) goes to returning the mortgage loan. People who have over 31% means they are financially sinking, and even if they are not yet delinquent on the mortgage they will soon be.
2. Back End Debt To Income Ratio of 51% – The ‘back end’ debt to income ratio is the real factor for the family financial survival, as it takes into calculation all other debts too (credit cards, car loans, student loans and other obligations). Having more than 51% of the gross income owed as debts means a financial slippery slope or crash is predicted, these families with back-end debt to income of 51% or more will need to join debt counseling program.
3. Owner Occupied Mortgages Only - The federal government want to help homeowners and not investors and home flippers. The borrower will need to prove they are living at the home they wish to include in the HAMP program, it can be 1-4 unit.
4. Mortgages Before 2009 – Since this program is meant to help homeowners from the 2008/9 economic slowdown, only mortgages which were originated before 2009 are eligible to be qualified in HAMP.
5. Unpaid Principal Criteria – The HAMP program wishes to help people who are going underwater, if not at the present than may be in the near future. Less than $729,500 unpaid principle for a single home unit. Less than $934,200 for 2 units; $1,129,250 for 3 units and $1,403,400 for 4 units.
6. Second Lien – This is the most ‘tricky’ requirement, as it is beyond the homeowner reach and depends on the goodwill of the second mortgage lender. The HAMP requests the holder of the second  lien (the other lender) to take a subordinate position with regards to the modified loan.

HAMP or HARP Success or Failure

Unfortunately too much hope was placed on these two programs to pull out the drowning homeowners from the underwater mortgage situations they have been at. Though a lot of federal funds have been invested on these two programs (and other) the figures are not optimistic. For the end of 2010 the foreclosure filings have increased dramatically!  Bank repossessions continue to increase.

The main issues which make these programs unable to breakthrough are the reliability on the lenders to finance most of the modifications and fit the new mortgages into new terms and conditions, which in some cases means losing money. With too many people loosing their jobs and having low credit scores holds many of them from getting better rates.

For the HAMP program over 1.1 million homeowners are under a trial period, this means they are at the second stage, where they have qualified for these requirements and now they have new terms on their mortgage. If they manage to be current for 90 days these new terms and conditions will turn permanent.

Home Affordable Refinance Program HARP

Get The Most Out Of HARP Program

If you seem to find it difficult to be able to refinance your present mortgage or seem to be experiencing difficulties carrying out your obligations upon your existing home loans? If your answer is YES, play the HARP and don’t play on your money.

HARP – (Home Affordable Refinance Program) is a component of the 2010 Obama administration’s $75 billion Making Home Affordable plan. Provided for all homeowners who are not able to refinance their present mortgage or who seem to be experiencing difficulties carrying out their obligations upon their existing home loans.

 This Obama administration 2010 HARP mortgage support is an excellent chance only for people who have home loans operated through one of two: Fannie Mae or Freddie Mac.

Fannie Mae and Freddie Mac, are the two mortgage holders which the 2010 Obama administration federal government mortgage loans took charge of last year. Fannie and Freddie at the moment are chopping interest levels for home loans they utilize to well under 2.5%, together with the goal to help people buying a home to achieve a maximum of 31% of a person’s gross cash flow spent on mortgage payments.

How to qualify for Home Affordable Refinance Program ?

First you must check if your loan is owned or has been guaranteed by Fannie Mae or Freddie Mac?”

Ask your mortgage lender or service or call directly for Fannie Mae: 1-800-7FANNIE (8am to 8pm EST) For Freddie Mac:1-800-FREDDIE (8am to 8pm EST).

 Before applying check if you stand these terms of 2010;

 1. You are the owner-occupant of a one- to four-unit home.

2. The loan on your property is owned or guaranteed by Fannie Mae or Freddie Mac.

3. At the time you apply, you have not been more than 30 days late on your mortgage payment in the last 12 months; or, if you have had the loan for less than 12 months, you have never missed a payment.

4. The amount you owe on your first lien mortgage does not exceed 125% of the current market value of your property.

5. You have a reasonable ability to pay the new mortgage payments.

6. The refinance improves the long term affordability or stability of your loan.

Is Home Affordable Refinance Program for you?

You should not decide on new home loan simply on its yearly interest rate. Your decision to refinance a mortgage loan will need to merely be done in the long-term financial savings to be greater than the original costs. For you to determine your break-even factor, divide the price of the actual refi by your monthly financial savings. The new sum symbolizes the amount of months you have got to remain at your property to generate this type of tactic to succeed.

 Any home owner with a 30-year, $200,000 mortgage charging 8% interest would probably pay out $1,468 every month. Having a 6% interest quote, a person’s payments are going to be 1,199$ which will save you 269$, meaning your break even will be after 8 month. *Assumes $2,000 closing costs

 Banks are generally seeking for modifications which credit seekers could live with so appliers need to clearly show evidence of existing earnings as well as that the income will keep going not less than 9 months.

Even with the HARP program unfortunately for many typical unemployment compensations tend to be a component of six-month process, therefore they do not meet the criteria. Making this plan a saving rope for those who probably would have managed without it.