HARP Application Denied? Here Are Your Options

The evolution of HARP, the Home Affordable Refinance Program, has been a huge disappointment for many underwater homeowners. The original HARP had a restrictive 125% loan-to-value ratio preventing those that need the help the most from qualifying. Then came HARP 2.0 which removed the loan-to-value limit completely; however, many lenders imposed an even more restrictive 105% loan-to-value limit.

HARP 3.0 is rumored to remove the Fannie & Freddie requirement to make the program available to more underwater homeowners. The Senate is said to be in talks with senior HUD officials to put together some kind of bill; however, it still has to pass both houses of Congress and be signed by the President.

The problem remains that even if Congress gets their act together, because lender participation is voluntary, mortgage lenders are playing by their own rules. Congress could remove all the barriers and red tape from this government refinance program but it’s still up to the lenders to decide if they want to play.

So far mortgage lenders are playing the HARP game on their own terms, meaning the majority of underwater homeowners are still not getting the help they need.

Don’t Take Your Denial Personally

If your current lender denied your HARP application or you’ve tried shopping from today’s best mortgage companies and feel like you’ve had the door slammed in your face, don’t take it personally.

Remember the majority of lenders are still paying by their own rules when it comes to HARP. There are a select few that are approving HARP applications without restriction for existing customers and new applications; you just have to find one. Community-based credit unions are a good place to start looking for a new lender to approve your HARP application.

HARP Application Denied. Now What?

If you feel like you’ve exhausted all avenues when it comes to HARP or simply don’t qualify because of the Fannie/Freddie requirement there might be other options available to underwater homeowners.

If you have an FHA, VA, or USDA mortgage HARP isn’t meant for you. These government-backed home loans have their own refinance programs. The FHA streamline refinance doesn’t take your loan-to-value, income, or credit into account. The VA has the same kind of program but calls it an Interest Rate Reduction Loan (IRRL). Even the USDA has a type of streamline refinance program.

If you already have a government-insured home loan call a HUD mortgage specialist at 888-995-HOPE to learn about your mortgage refinancing options.

Lender Foreclosure Abuse Settlement

The government recently settled a 26 billion dollar settlement with mortgage lenders for foreclosure abuses. Part of the settlement, 3.5 billion dollars is being earmarked for helping non Fannie & Freddie backed underwater homeowners benefit from today’s low refinance rates.

Lenders obligated under the settlement include Wells Fargo, Bank of America, Citibank, Ally, GMAC, and JP Mortgage Chase. If you’re not covered by Fannie Mae or Freddie Mac contact your lender and ask about mortgage refinancing under the foreclosure settlement.