With negative equity being the biggest factor stopping current home owners from refinancing the current administration has revised their guidelines for the Home Affordable Refinance Program, HARP. A typical refinance for and underwater homeowner would require the borrower to bring additional cash to the table in order to refinance. The program is applicable to loans owned by or secured by Fannie Mae or Freddie Mac.
Changes to the program include:
- No loan-to-value (LTV) restrictions for up to 30 year fixed rate mortgages
- Fixed rate loans between 30 and 40 years have a %105 LTC
- Any borrower with and 80% or below LTV is not eligible.
- Extension of the program until the end of 2013.
- Owner bust not have been behind on their payments within six months or only one 30 day delinquency within the past year.
- As before, Fannie Mae or Freddie Mac must have acquired the loan prior to April 1, 2009.
- No longer responsible for and warranties or representation with the original loan.
- No longer under the standard underwriting representations and warranties as long as the program instructions are followed correctly.
- Not required to make any representation or warranty as to value, condition, or marketability of the property unless a new appraisal is obtained.
- Allowed use of AVMs to establish the eligibility of the borrower in relation to the LTV of the property.