FHFA Announces Extension of HARP through 2015
Today the Federal Housing Finance Agency (FHFA) directed Fannie Mae and Freddie Mac to continue the Home Affordable Refinance Program (HARP) for two more years. HARP was originally slated to expire in December, 31 2013 and is now extended to December 31, 2015.
This is good news for those in the mortgage business – including notaries- who are now likely to see a continued stream of refinances and possibly even an increase. Since HARP was introduced by FHFA and the Department of the Treasury in April 2009, Fannie May and Freddie Mac have helped approximately 2.2 million borrowers refinance their homes.
Acting Director of the FHFA, Edward J. DeMarco explained, “More than 2 million homeowners have refinanced through HARP, proving it a useful tool for reducing risk.” He noted that the extension was so more underwater borrowers could benefit from the reduced rates. Extending the program will also offer reduced risk for Fannie Mae, Freddie Mac and taxpayers, and provide guidance to lenders.
Not only is the FHFA going to extend the HARP program, but also plans to launch a nationwide informational campaign to educate homeowners about the benefits of HARP. The campaign intends to explain HARP’s unique purpose to offer borrowers, who owe more on their house than it’s worth, the ability to refinance.
Eligibility Requirements for a HARP Refinance:
Homeowners seeking to take advantage of HARP must first qualify for the program. Their loan must be guaranteed or owned by Fannie Mae or Freddie Mac and the mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009. Loans previously refinanced under HARP are not eligible unless it is a Fannie Mae loan that was refinanced under HARP from March-May 2009.
Additionally, HARP guidelines require the borrower to be current on mortgage payments with no late payments for the last six months and no more than one late payment in the last 12 months. The current loan-to-value (LTV) ratio must be greater than 80%.
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