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Harp 2.0 Mortgage Refinance Real Estate Option

re-finance 00zzToday we want to talk to you about the Harp 2.0 refinance real estate option that could save you lots of money. The Home Affordable Refinance Program or Harp 2.0 is a government program that allows home owners of both primary residence and investment properties to refinance their properties and take advantage of some of the very attractive low interest rates that are present today. It was started by Federal Housing Finance Agency to help those homeowners who were drowning in debt by refinancing, even if they owed more than what the house is worth. Please be aware that this government program expires in 2017, so if you are interested in refinancing your property it’s something you should take advantage of now. Some of the requirements to be eligible for HARP 2.0 are that you had to have sold your mortgage to either Fannie Mae or Freddie Mac by June 1, 2009.

You must have no late payments in the last 6 months, no less than 1 late payment in the past 12 months, you must be up to your current mortgage payment along and this must be your first refinance through HARP.

Along with the HARP eligibility requirements, lenders may have their own. Lenders require you to provide proof of income, and some even require a minimum credit score to qualify. Many banks like Bank of America, Chase and Wells Fargo are experience delays in the application process due to the sheer volume of applications. So as I have said before, if this is an attractive option for you, you will want to start the process immediately.

If you have any questions about Harp 2.0 please feel free to email or call our office and we will be happy to explain it to you further.

Accidental Landlords Take Advantage of HARP 2.0 to Re-Finance Their Investment Properties and Save Thousands of Dollars

re financeAs we previously discussed, the Harp 2.0 program is a government sponsored program intended to help many struggling homeowners re-finance their homes.  An often overlooked aspect of Harp 2.0 is that it is also intended to help accidental landlords re-finance their investment properties and help them save thousands of dollars.

An “accidental landlord” is someone who purchased a new primary residence, but was unable to sell their prior primary residence.

Under this scenario, the initial primary residence is converted into an investment property.  In other words, after you purchased your new home you could not sell your old home.  As a result, you started renting the old home and became an “accidental landlord.”

The question that is often asked is under this scenario would the “investment” home/property be eligible to re-finance under Harp 2.0?

If the homeowner can qualify to re-finance under Harp 2.0, then there is a good chance that the converted investment property may also qualify.  And if it qualifies, then that could potentially save the accidental landlord thousands of dollars over the life of the loan.

There are no doubt obstacles that need to be overcome in order for an accidental landlord to qualify to re-finance under Harp 2.0.  But generally speaking, in order to qualify the homeowner must be current on their mortgage, with no late payments exceeding 30 days in the last six months and no more than one late payment in the last year.  Under the initial Harp guidelines, loan to value limits were capped at 125%, but Harp was modified (Harp 2.0) to remove those caps and now there are no “underwater” limits.  On the other hand, however, the current loan to value ratio must be greater than 80%.

But if you want to take advantage of this program you better hurry.  The program is currently set to expire on December 31, 2015.

If you do qualify, the potential savings could be significant.  Of course, if you do qualify, and decide that re-financing under Harp 2.0 will save you thousands of dollars, then make sure you follow these seven tips to save money on closing costs.  And, of course, don’t hesitate to contact our office to discuss your options further.

Historically Low Interest Rates are Pushing Many Struggling Homeowners to Re-Finance While Banks Still Remain Reluctant to Lend

Loan-growth.jpgExisting homeowners are taking advantage of the refinancing opportunities nationwide.

Looking at statistical data from the past week, close to 77% of mortgage applications consisted of refinancing. As reported by the Mortgage Bankers Association, this is the highest total since March 2nd.

Indeed, HARP 2.0 is intended to help many struggling homeowners take advantage of today’s historically low interest rates. To become eligible for the new HARP, a homeowner must have a mortgage sold to Fannie Mae or Freddie Mac on or before May 31, 2009. The homeowner must also be current in their payments and without any late payments in the past six months.

Additionally, some fees were also eliminated on loans that run 20 years or less and lowered on longer term mortgages. In some cases, the homeowner will also no longer need a new appraisal on the home, which should reduce the refinance costs.

Also note worthy is the fact that there is no limit on how deeply underwater someone can be as long as they re-finance into a 30 year fixed mortgage.

The new changes should not only benefit many homeowners, but should also help financial institutions become fewer homeowners will eventually default.

But one of the biggest factors that will drive the success of this new program will be interest rates. Today interest rates are hovering at historically low levels. For instance, the average rate for a 30 year mortgage today is 4.2%. If interest rates rise, however, this program may not be as attractive to many.

Unfortunately, however, the imbalance between refinancing and home buying will continue into the near future. Historically low rates have given people real options that they haven’t had in a quite some time. So whether your looking to refinance, enter into a short sale, or buy a new home, the experienced Real Estate Attorneys at Alvarez & Barbara, LLP can assist you today. Pick up the phone and call us today.
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But with the good also comes the bad. It turns out that banks are actually tightening their lending standards because they are reluctant to expose themselves to potential defaults for minor profits. Furthermore, the issue of low profits affects the banks ability to unload the mortgage interest to potential investors.

Banks seem to have learned their lesson from the subprime loan debacle. By becoming cautious lenders, they avoid the potential risks inherent with foreclosure litigation, specifically time and money.

Breaking it down even further, the low rates coupled with new lender standards have the potential of hurting the economy even further. Why? Well put simply, those who can help turn around our economy are the ones being turned away by lenders. The average American buyer is the segment of America that might actually heal the industry.

On the flip side, but also adding to the market woes, the relatively high affordability of housing has prevented individuals from placing their homes on the market. This has a direct impact on inventory, which makes it less likely for a buyer to find his or her new home.

New Rules are Intended to Help Streamline the Re-Fi Market to Allow Many Struggling Homeowners to Take Advantage of Today’s Historically Low Interest Rates

FHA-Refinance-of-Borrowers-With-Upside-Down-Houses.jpgBoth the executive and legislative branches of government are making strides as of late to help borrowers get back to a position where they won’t be so underwater on their homes. For now, most of these programs will benefit only those with government sponsored loans. Specifically, the new FHA streamline program will help target borrowers with FHA loans that have been looking to refinance their homes, but to no success.

Among the new provisions, the FHA will drastically reduce mortgage fees for those borrowers who qualify for this new program starting June 11, 2012. By reducing the amount of fees, a homeowner will have more incentive to refinance because the amount spent on fees will no longer cut into the amount the borrower was scheduled to save.

Another popular provision, the “no-appraisal rule,” will allow homeowners to refinance their homes even if the home is underwater. Put simply, the new program does not require the appraisal of the home. As of today, there are approximately 3.4 million households with qualifying FHA mortgage loans. This program could help each of these households save an average of $250 per month. This program is in addition to the HARP program which is intended to help many struggling homeowners.

By providing an inexpensive method of re-financing, the FHA is preventing the likelihood of foreclosing on responsible homeowners. In order to qualify, you must meet the following criteria: (i) your current FHA mortgage must have been assigned prior to May of 2009; and, (ii) you must be current on your mortgage payments and not have been late over the last 12 months.

What about non-federal loans? Help could be on the way. Three bills were introduced in Congress that could help borrowers with non-federal loans save money through refinancing. The Responsible Homeowners Refinancing Act is designed very similar to the FHA’s streamline program, which is helping as many as 3 million home owners save up to $3,000 a year. According to the Bill’s sponsors, “[T]he legislation would pay for itself . . . by reducing default rates and foreclosures . . . .”
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Our Real Estate attorneys will work hard to protect your home from being foreclosed on for the foreseeable future. We also have experienced attorneys that can help you with all your refinancing and short sale needs. Don’t hesitate and give us a call today.