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Underwater on Your Mortgage? HARP May Help [UPDATE]

May 12, 2015 | By and

UPDATE: Originally slated to expire at the end of 2015, it was announced on May 8  that both the Home Affordable Modification Program [HAMP] and the Home Affordable Refinance Program [HARP] will be extended for an extra year, until the end of 2016.  

Federal Housing Finance Agency Director Melvin L. Watt said that since both programs were launched in 2009 they have provided “critically important relief for many borrowers by allowing them to lower their monthly payments and, as a result, have prevented many foreclosures.” 

Can HARP or HAMP help you? Read on to learn more.

When Paul Warmee, Jr. lost his job in the boating industry at the cusp of the Great Recession in 2008, he found himself saddled with two mortgages and his family struggled to stay afloat on a single income. Several years later, after failing to find another job and with their financial situation becoming increasingly dire, Paul phoned his mortgage company. Was there any way to stay in their home as they struggled to keep up with mortgage payments?

Fortunately for Paul and his wife Cherie, they found out that there was a helping hand, called HARP.

Otherwise known as the Home Affordable Refinance Program, HARP is a government program that works to help homeowners refinance their mortgages —even when they owe more than the value of their homes, or are “underwater.”

What’s more, nine out of 10 homeowners who are eligible for HARP don’t even know how to take advantage of it. Paul learned through his mortgage company that he could refinance their first-lien mortgage with the help of HARP, even though they had a second mortgage. Refinancing saved them $305 a month on mortgage payments.

So how does someone if they’re eligible for HARP? It’s a lot easier than people think. Here are the steps to learn if and how HARP can work for you:


1. Find out who owns the mortgage.

If either Fannie Mae or Freddie Mac owns your mortgage, you may be eligible for HARP. To find out if Fannie Mae does own it, visit the Loan Lookup tool and enter your full name, address, and the last four digits of your Social Security number.

If Fannie Mae does not own it, there is a chance that Freddie Mac does. Visit Freddie Mac’s Loan Look-Up Tool to find out.

You can also visit HARP’s website to find out if you may be eligible.

If neither Fannie Mae nor Freddie Mac owns your mortgage, be sure to contact your mortgage company to ask about other options for refinancing.


2. Know the date when your loan closed.

If the date you signed final loan documents on your current mortgage s (or your “note date”) was on or before May 31, 2009, then you may qualify for HARP. If your note date is more recent, check with your mortgage company for other options. If you’re unsure, Fannie Mae’s and Freddie Mac’s Loan Lookup tools will have that information.


3. Know your loan-to-value ratio.

Your loan-to-value ratio, or LTV, is what lenders first look at when they are underwriting a loan. It estimates how much you owe compared to how much your home is worth. Fannie Mae provides its own Loan-to-Value Calculator to help you find out your LTV. To determine your LTV, all you need to know is:

  • Your estimated home value, your first mortgage balance
  • Additional mortgage balances, or any other liens on your home (if applicable)


4. Maintain a good payment history on your mortgage for the previous 12 months.

Good payment histories are a huge factor for qualifying for HARP assistance. This means having no late payments in the past six months, as well as not more than one 30-day late payment in the past six to 12 months.

If you haven’t been current with your payments, contact your mortgage company to find out other options.


If You’re Eligible…

After finding out if you’re eligible for HARP, you will go through an application, approval and closing process that is similar to how you got your original mortgage. Luckily, a HARP lender will be there to guide you.


1. Gather your financial information. This includes:

  • Mortgage statements and information on other mortgages (if applicable)
  • Statements from your other monthly debt payments, such as credit card bills, student loans or car loans
  • All of your income information, such as paystubs and income tax returns


2. Find a HARP lender

Contact your mortgage company to see if they are an approved HARP lender. You can also find a HARP Lender in your state by using Fannie Mae’s search tool. Using a financial checklist and a contact log will help prepare you in advance for when you do speak with your mortgage company or a housing counselor. You can download the forms here.


If You’re not Eligible…

If you‘re not eligible for HARP assistance, there are still options to refinance a mortgage.

Visit Fannie Mae’s Refinance Overview to learn more about the possible benefits of refinancing a mortgage. After you have found out all of your financial information, reach out to your current mortgage company to discuss the best mortgage options for you.

For additional assistance, reach out to a free HUD-approved Housing Counselor for advice. Or if Fannie Mae owns your loan, you can always contact Fannie Mae’s Mortgage Help Center Network, which offers nationwide assistance over phone or email. Both English and Spanish advisors are available to assist you. Most importantly, all services offered by the Mortgage Help Center Network are free.

Or just follow Paul’s advice: “Do yourself a favor and make the call to find out if you’ll qualify. You have nothing to lose, and could save significantly by trying.”




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