If Your Home Mortgage Is Underwater, Help Is on the Way

If Your Home Mortgage Is Underwater, Help Is on the Way

The federal government has announced changes to its Home Affordable Refinance Program designed to assist those who owe more than their homes are worth.

Published October 26, 2011

On Monday, the federal government announced that it would revise its Home Affordable Refinance Program (HARP).


In 2009, HARP was implemented in order to help those who are “underwater” on their home payments and owe more than their homes are worth.


Although the foreclosure crisis has affected many communities, it has hit Blacks especially hard. Black homeownership has plummeted six percent to 46.2 percent since 2004 — more than double any other racial or ethnic group. Additionally, nearly eight percent of Blacks have lost their homes to foreclosure, compared to four and a half percent of whites.


The overhaul of HARP will allow borrowers to refinance regardless of how far their homes have fallen in value, an option many critics thought should have been in the original plan. The overhaul will also eliminate appraisals and extensive underwriting requirements for most borrowers.


Anyone who has a mortgage owned or guaranteed by Fannie Mae or Freddie Mac, sold to the agencies on or before May 31, 2009 and who has not missed any mortgage payments in the past six months is eligible for HARP. However, you are not eligible if you have a mortgage that was previously refinanced under the HARP program.


“We know that there are many homeowners who are eligible to refinance under HARP and those are the borrowers we want to reach,” said Federal Housing Finance Agency Acting Director Edward J. DeMarco. “Our goal in pursuing these changes is to create refinancing opportunities for these borrowers, while reducing risk for Fannie Mae and Freddie Mac and bringing a measure of stability to housing markets.”


The changes to the federal program are expected to publish to mortgage lenders and servicers by November 15.  



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 (Photo: Scott Olson/Getty Images)

Written by Danielle Wright


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