Mortgage Refinance Programs

The passage of a new bill added the Home Affordable Refinance Program (HARP) to the list of available mortgage refinance programs. The program is designed to help give relief to homeowners so that some mortgages can be refinanced but with several hinderances. The new plan requires homeowners to be current on payment and the bill refers only to loans sold to Fannie or Freddie by May 31, 2009.

The Home Affordable Refinance Program, or HARP, was started in 2009 and let homeowners refinance mortgages at lower rates and qualified borrowers to bypass the usual requirement of having at least 20 percent equity in their home.

To spark interest in HARP the program will lower fees, eliminate the current 125% loan-to-value ceiling, waive lender warranties and eliminate the need for property appraisals.Few people have signed up because upside down borrowers — those who owe more than their homes are worth — couldn’t qualify under the program. About 22 percent of homeowners–11 million–are upside down.

As of September 1, fewer than 900,000 homeowners, and only 72,000 upside down homeowners refinanced through HARP. The program was hoped to have helped 4 to 5 million homeowners.

Those who’d lost the most value in homes weren’t eligible. Participation was limited to those whose home values were no more than 25 percent below what they owed lenders. That excluded roughly 10 percent of borrowers.

In some areas of the country, borrowers have lost nearly 50 percent of their home’s value. Another problem: Homeowners must pay thousands in closing costs and appraisal fees to refinance. Typically, that adds up to 1 percent of the loan’s value — $2,000 in fees on a $200,000 loan. Credit scores were too low. Sinking home prices also have many fearful that prices had yet to bottom out. Who wants to throw good money after a depreciating asset?

1) The refinancing plan is now eligible to any borrower with a GSE-backed loan independent of how deeply underwater they are.

2) The cost of refinancing has been reduced.

3) Fannie and Freddie will:

a) eliminate risk-based fees,

b) reducing key elements of closing costs,

c) reducing the number of homeowners who are required to get appraisal,

d) reducing title insurance and lien processing.

e) the Treasury Department will work with states eligible for the Hardest Hit Fund to see if they can use their funds to lower closing costs further.

4) Mortgage insurers will transfer their coverage from old loan to new loan automatically. This also deals with reps and warranties.

5) Major lenders agreed to automatically re-subordinate their second lien behind the new loan.

When you refinance a loan, you’re essentially creating a new mortgage, unlike a loan modification, where you modify the old mortgage. Whether through HAMP, HARP or another program, the paperwork has to be correct.

To spark interest in the Home Affordable Refinance Program (HARP), the program will lower fees, eliminate the current 125% loan-to-value ceiling, waive lender warranties and eliminate the need for property appraisals.

There Are Other Mortgage Refinance Options

“There is a knack to providing timely, financially-sound and unfortunately–for everyday consumers—very intricate alternatives to banks,” said Rich Marquez, a former mortgage loan officer who has worked in banking and financing for 10 years. Marquez works with Eric and Roddy Lanigan.

“I can call a lender, speak with a decision maker, turn the paperwork around and present it for a client in the way banks expect and need for it to be positioned for a successful refinance or renegotiation.”

Banks are receptive to the Home Affordable Modification Program (HAMP) plans completed by Marquez and his team  because they are viable and work for both sides–homeowner and lender–which can ultimately prevent a foreclosure.

Consult Lanigan and Lanigan for Mortgage Workouts

At the end of the mortgage workout, a bank may accept a lower monthly payment; a family can stay in the home they love with a mortgage that they can afford with the possibility of a reduced principal, a forgiven second mortgage, or a lowered interest rate.

The options are considerable for the mortgage workout that Eric and Roddy Lanigan and Rich Marquez present for acceptance by the lender. However, it’s important to realize that every situation is different. There are various mortgage workout results based on the financial situation and economics of a family, a business or an individual.