Will the revised HARP 2.0 and the proposed settlement with the banks announced by the administration really help underwater home owners?

That is a good questions. HARP 2.0 introduced back in November 2011 was designed to help homeowners who were current on their mortgage but their homes were way below market to refinance to today’s interest rates, thus reducing their monthly payments. Only Fannie Mae and Freddie Mac investor loans prior to June 1 2009 qualified.  While this is a step forward, it really should be aimed at helping all underwater mortgage holders.  This could be a long process – so be prepared.

Will the new mortgage relief program announced last week replace HARP 2.0?

The new program will not  limit the relief for home owners to refinance just  to Fannie Mae and Freddie backed mortgages. The stipulation is that they must be current on their mortgage, and no late payments for the past 11 out of 12 months.

Part of this program includes a Principal Reduction of $17 billion being allocated to approximately 1 million homeowners who are both underwater and behind on their mortgages.  This is a three year program, which begs the question – how many people can hold on that long? And for people that are in default, a principal reduction may not be the answer if they are experience a hardship of some sort.

None of these programs will stop the foreclosure process. Homeowners in default should contact their lender immediately to see if they qualify for any of these programs. Otherwise in order to avoid a foreclosure, a short sale may be a better option.






About Linda Urbick Linda

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Filed under: Real Estate

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