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You can refi if you’re underwater

By Holden Lewis · Bankrate.com
Tuesday, June 22, 2010
Posted: 10 am ET

Yesterday I wrote that the lender won't refinance the mortgage if you owe more than the house is worth. Carol, a loan officer, gently reminded us of the existence of the Home Affordable Refinance Program. HARP is designed to let people refinance even though they are upside-down on their houses.

I had forgotten about HARP, even though I wrote an article a month ago about a homeowner who got a HARP refi after persevering through months of obstacles.

From the feds' standpoint, HARP is an afterthought. The Treasury Department compiles monthly statistics on the Home Affordable Modification Program, but I can't find stats on HARP. So no one seems to know how many HARP refis there have been.

Carol also points out that the FHA and VA permit streamline refinances, in which no appraisal is required.

To qualify for these refi programs, you have to have a good payment history.

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7 Comments
Ms Margaret
July 20, 2010 at 9:40 am

Miki-- did you check to see if your mortage is owned by Fannie Mae? Go their website and type in your address -- they'll let you know in a click if they own it.

DMoney
July 01, 2010 at 2:24 pm

What options do we have if our loans are not owned by Fannie Mae or Freddie Mac? I have two loans with Chase. They refused my loan modification request (after I was put in the Trial Payment period for 6 months). The reason for my denial was that I had too much in my savings and 401K. Then I tried to refi with them, and I was denied as I did not have enough money

My Interest Only loan readjusts this coming December...Any help will be greatly appreciated!!

Miki
June 25, 2010 at 2:53 pm

I am so glad I ran across this article....I am in the same boat as "MT"....my mortgage is with Chase....I inquired about the Home Affordable program, to which they told me I do not qualify b/c my loan (while managed by Chase) is owned by a "private investor"....whatever that means....in any event, I refinanced in 2006 which at the time was Wash Mutual. My loan re-adjusts from a 5 yr fixed in 2011....I am frantic trying to find a bank that will re-fi me at a lower rate.....Im drowning - Help !!

Holden Lewis
June 24, 2010 at 12:49 pm

I did a story not long ago about a guy with a Countrywide loan who got a HARP refi with Chase. It took him seven months. And it looks like Chase has told you no. Have you tried MetLife Home Loans? They had a HARP refi program for people with Freddie-backed loans. It had a lot of restrictions, but maybe it's worth a shot.

MT
June 24, 2010 at 12:08 pm

Is there any information out there regarding lenders who are accepting applications for HARP refis from new customers? I qualify for the HARP refinance program in all respects, but my mortgage is held by a subservicer that does not offer refinancing services. I have called around to various lenders who are supposedly participating in the HARP program (e.g. Chase, BofA) but have been told that they are only offering MHA refinances to their current mortgage customers. I've looked at the Fannie and Freddie guidelines - they permit HARP refinances to be processed by a different lender (with some exceptions for those with PMI insurance). But, in practice, it seems like lenders are sticking with same servicer HARP refinances only. Would love to see a list of lenders who are offering HARP refinances to new customers (if such a thing exists).

Michael Becker
June 24, 2010 at 9:05 am

It may also be possible to refinance without an appraisal using Fannie's HARP program called DU Refi Plus. If the AUS (automated underwriting system) gives you an approval with an appraisal waiver.