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The New HARP Refinance Program Allows For Unlimited Loan to Values

President Obama has drastically revamped the Home Affordable Refinance Program (HARP) in 2011. By its own estimation, 7 million underwater homeowners will benefit from today’s refinance mortgage rates under the new HARP. If you’re underwater in your exiting home loan and have been frustrated that you haven’t been able to take advantage of today’s low mortgage refinance rates, here’s what you need to know about the new HARP.

HARP is for Underwater Homeonwers

HARP was introduced in 2009 to help homeowners with low equity take advantage of low mortgage refinance rates. HARP initially required that Freddie Mac or Fannie Mae backed your mortgage before June 2009 and that your loan-to-value ratio was below 125%. The old HARP was a failure due to high costs, lack of participation by lenders, and the restrictive loan-to-value ratio. According to the government, the expanded HARP program will help seven million underwater homeowners take advantage of today’s low refinance mortgage rates.

President Obama Signed HARP Executive Order

October 24th the President announced that HARP would be expanding to help more underwater homeowners qualify for mortgage refinancing. The new HARP has been streamlined to be more accessible by eliminating the 125% loan-to-value ratio requirement. No matter how underwater you are in your existing mortgage you can qualify, especially in parts of the country where Loan-to-Value ratios exceed 200 percent like Arizona, Michigan and Nevada.

One of the problems with the old HARP was lack of lender participation. Under the new program, the risk has been shifted from mortgage lenders to Fannie and Freddie (the government), which should boost lender participation and make HARP more accessible.

HARP Mortgage Refinancing Program Dates

The government is expected to reveal the complete program details November 15th, 2011. Mortgage lenders will not have specific details on the new HARP until after this date. You should be able to start applying for help under HARP after Thursday, December 1st, 2011. Don’t be surprised if many lenders don’t have their HARP offerings rolled out until January, 2012. The government is encouraging underwater homeowners to choose shorter term-lengths when refinancing under HARP. According to one government spokesperson, this is being done to promote loans that build equity faster, helping homeowners get right side up in their mortgages.

You can learn more about refinancing with today’s best mortgage refinance rates without paying closing costs by checking out my free Underground Mortgage Videos.

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