Rebuilding American Homeownership: Yet Another Government Refinance Program

Another government refinance program has been proposed in Washington by Senator Jeff Merkley. The Rebuilding American Homeownership (RAH) program is for underwater homeowners who do not have their home loans with Fannie Mae or Freddie Mac. This new government refinance program is for responsible homeowners that make their payments on time and cannot receive help under the Home Affordable Refinance Program (HARP 2.0).

Help for Non-Government Backed Underwater Homeowners

If you’re underwater in your existing mortgage and are not backed by Fannie Mae or Freddie Mac this is the program for you. Rumors of HARP 3.0 removing the Fannie/Freddie requirement have yet to happen and this is the first program that could meet the needs of those left out of the HARP 2.0 refinancing party. This is rumored to include those underwater with jumbo mortgage loans. The government estimates there are three million underwater homeowners that have mortgages not backed by Fannie Mae or Freddie Mac.

Proposed Rebuilding American Homeownership Government Refinance Program

The program would create a temporary government backed trust to purchase mortgages from banks and private lenders not backed by Fannie Mae or Freddie Mac. The trust would raise money by selling mortgage backed securities and bonds to investors ensuring ongoing capital for purchasing home loans. The program proposes a 2% spread on refinance rates allowing RAH to operate without taxpayer funding. (2% seems like a lot)

The program is proposed as a short-term measure that would close down after three years when all of the loans were sold. The only requirement would be that you are current on your mortgage payments and not with Fannie Mae or Freddie Mac. The program doesn’t seem to address loan-to-value ratios over 140% because lenders must take a loss on the mortgage, which is not likely to happen.

The Rebuilding American Homeownership program would require mortgage insurance until your balance was paid down to an 80% loan-to-value ratio. Short-sales of homes in the program would not be allowed for four years.

RAH Mortgage Refinance Loans

The program proposes three choices for underwater homeowners. There is a 30-year fixed rate mortgage at 5 percent interest, a 15-year fixed rate mortgage at 4 percent interest and a combo mortgage. The 15-year fixed rate is a better deal but would offer higher payments including mortgage insurance. If you’re able to refinance under RAH you’d be paying higher refinance rates due to the 2 percent markup, which should still be lower than what you’re currently paying.

The third option includes a second mortgage loan for the loan-to-value balance over 95%. This second mortgage would not accrue interest or require payments for the first five years of the loan. This would act as a temporary mortgage reduction with minimal losses for lenders.

Will RAH Underwater Mortgage Refinancing Work?

Usually when a program sounds too good to be true in Washington, it never happens as advertised. Rebuilding American Homeownership seems to benefit underwater homeowners while limiting risk for lenders. A program like this is worthwhile as there are an estimated 3 million homeowners left out of latest version of the Home Affordable Refinance Program (HARP 2.0). It’s unclear how many of these homeowners have given up and walked away from their mortgage loans.

As with any proposed legislation it still has to make it through the House and Senate before being signed into law by the President. Stay tuned for more on the government’s efforts to bail out underwater homeowners.

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You can can learn more about saving money on your next home loan by checking out my free Underground Mortgage Videos.

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Here’s a quick sample to get you started refinancing your underwater home loan with a government refinance program…

HARP Government Refinance Program Update #MyRefi

The government refinance program known as HARP (Home Affordable Refinance Program) has undergone a lot of changes recently that affect the requirements for eligibility. If you’re underwater and have been unable to qualify for mortgage refinancing in the past it will be well worth your while to look into the new government refinance program. Here are the key points you need to know about the government refinance program known as HARP.

HARP 3.0 News

HARP 3 rumors started swirling after President Obama’s January 2012 State of the Union Address. The President declared that every responsible homeowner should refinance their mortgage promising to cut through the red tape preventing millions of underwater homeowners from doing so. Here’s an update with the latest HARP 3 news and the Whitehouse campaign they’re calling #myrefi.

The biggest problem with the HARP program to this point is the requirement that Fannie Mae or Freddie Mac have your home loan. HARP 3.0 is rumored to eliminate the Fannie Mae/Freddie Mac requirement, meaning every responsible homeowner (meaning you have no late payments) could qualify for the program. These changes are rumors and don’t appear to be part of proposed legislation under the Responsible Homeowners Act of 2012. HARP 3.0 could also extend help to underwater homeowners with jumbo mortgages.

No one knows when HARP 3.0 will be official or for whom the program will be best suited. Based on the rumors the new government refinance program could target self-employed homeowners or anyone unable to qualify for mortgage refinancing because their original home loan was based on stated income.

There are millions of underwater homeowners in the United States who have been unable to take advantage of today’s low refinance rates excluded from HARP 2 that could benefit from the changes proposed in HARP 3. You can learn more about President Obama’s refinance plan by visiting the website at or following #MyRefi on twitter.

HARP 2.0 Program Overview

If you’re underwater in your existing home loan, meaning you’re owing more than your home is worth, you may be able to take advantage of today’s low refinance rates without paying cash-in or buying private mortgage insurance. This government refinance program goes by several names. It’s officially called the Home Affordable Refinance Program (HARP) but it’s also been called the Making Home Affordable program and the Obama Refinance Plan.

Like any government program there are requirements to be met in order to qualify. You can qualify for mortgage refinancing under HARP 2.0 if:

  1. Your home loan must be held by Fannie Mae or Freddie Mac
  2. Fannie/Freddie must have acquired it before June 1st, 2009
  3. You must not have any late payments within the past 6 months
  4. FHA, VA, USDA or Jumbo Mortgages are not eligible

How Do I Tell if My Mortgage is Fannie Mae or Freddie Mac?

The Fannie/Freddie requirement for mortgage refinancing is critical. You can check the status of your home loan using online lookup tools on Fannie Mae & Freddie Mac’s website using the links below. You must find your address using these tools in order to be eligible for this government refinance program.

Fannie Mae:
Freddie Mac:

If your mortgage is not found with Fannie Mae or Freddie Mac you will not be eligible for refinancing under HARP. It is rumored that HARP 3.0 will remove this requirement for homeowners who are not under Fannie Mae or Freddie Mac; however, as of mid-2012 this legislation has not materialized. Once you find your address using Fannie Mae or Freddie Mac lookup you’re ready to start shopping from today’s best mortgage lenders for HARP refinancing.

How to Shop for HARP Mortgage Lenders

Just because you’re eligible for a government refinance program doesn’t mean you don’t have to worry about overpaying lender fees or points. Because lender participation is voluntary, the government built incentives into the program allowing lenders to markup rates and fees for HARP applicants.

This means shopping for the lowest refinance rates is crucial while avoiding unnecessary discount points and fees. When comparing refinance rates from the top mortgage companies keep in mind that most lender quote interest rates that include points first. Paying unnecessary discount points to buy down your mortgage rates increases your out-of-pocket expenses, making it more difficult for you to break even recouping closing costs. The same is true with fees like the loan origination fee which is paid to the company or broker arranging your refi.

I’ve reviewed a number of the best mortgage companies on this site and I’ve found the lowest fees are often available from community based credit unions. I recommend avoiding the big names like Wells Fargo and Bank of America (which has a 90+ day backlog) in the beginning and start shopping from your local credit unions.

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You can learn more about getting the best deal on your HARP refinance while avoiding junk fees and discount points by checking out my free Underground Mortgage Videos.

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Here’s a quick sample to get you started finding the right lender for your next home loan…

What HARP Changes Mean For Underwater Mortgage Refinancing

The Home Affordable Refinance Program (HARP) has been a dud since the program was created. Now by Executive Order, President Obama has made sweeping changes intended to qualify homeowners that need the help the most. Here’s how HARP can help you take advantage of today’s refinance mortgage rates from the best mortgage lenders if you’re underwater and owe more than your home is worth.

There Are No Loan-to-Value Restrictions

The best thing about changes to HARP is that you don’t have to qualify based on the equity in your home. Under the old program you couldn’t qualify if you owed more than 125% of your home’s value. This equity requirement has been eliminated so if you’re underwater you can qualify based on simply paying your mortgage on time. Also gone are the requirements to have an appraisal done…since loan-to-value is out of the picture there’s no need for an appraisal. Most of the fees associated with closing have also been eliminated to remove that barrier to mortgage refinancing.

What’s the Catch?

There’s always a catch to any government program in the United States and for HARP it’s a big one. Your mortgage must be held by Fannie Mae or Freddie Mac. If you’re underwater in a jumbo mortgage not backed by Fannie or Freddie or if your mortgage is held by a private bank you won’t qualify for HARP.

If you’re not sure who’s holding your mortgage you can find out by visiting Fannie & Freddie’s websites:

How to Qualify for Today’s Refinance Mortgage Rates

In order to qualify for HARP you must be current on your mortgage payments for six months and not have more than one late payment in the previous year. Fannie or Freddie must have had your mortgage loan prior to May 31st of 2009 and the property must serve as your primary home. (Anything larger than a four unit dwelling is excluded)

According to the government mortgage refinancing under the new program will save you $2,500 a year which works out to $200 or so a month based on today’s refinance mortgage rates. The Obama Administrations estimates that the new HARP program will help one million underwater homeowners qualify for mortgage refinancing.

Shorter Term Lengths Are Encouraged

The government is encouraging qualified homeowners to choose term-lengths of 15 to 20 years by eliminating most of the closing costs associated with these home loans. Under the old HARP program your only option was a 30-year fixed rate mortgage loan. The reasoning behind this move is by choosing shorter term-lengths underwater homeowners will build equity in their home at an accelerated rate.

How Soon Can I Apply for HARP Refinancing?

Fannie and Freddie are planning to have the full program details released by November 15th of 2011. The first home loans under HARP should be available by December 1st, although many lenders may not have their programs rolled out until the first quarter of next year (2012).

Click Here For More Details…

If you’d like to learn more about taking advantage of today’s low refinance mortgage rates without paying unnecessary lender fees check out my free Underground Mortgage Videos.

  • Free Underground Mortgage Videos

Here’s a quick sample to get you started finding today’s lowest refinance mortgage rates without paying lender junk fees…

Jumbo Mortgage Rates Scam

If the value of your home is above the conforming loan limit for your region of the country, Jumbo Mortgage Rates are a concern for you when refinancing your home. What you might not know is what has your broker salivating over closing and is the hidden markup found in nearly all Jumbo Mortgage Rates. Here are the basics you need to know about refinancing with Jumbo Mortgage Rates to help you avoid paying too much at closing and thousands of dollars every year in hidden markup.

Jumbo Mortgage Rates Basics

If the dollar amount of your home loan is above the conforming loan limit set each year by Fannie Mae and Freddie Mac you have a jumbo mortgage loan. This means that Fannie Mae and Freddie Mac won’t back the entire amount of your home loan. Because of this, Jumbo Mortgage Rates are typically higher than interest rates found on conforming home loans because the lender is assuming more risk of foreclosure.

What you need to know about Jumbo Mortgage Rates is while it’s true you may not be able to avoid this risk based markup by the lender, what you need to avoid at all costs is commission based markup by the broker. Did you know that according to the Secretary of Housing and Urban Development, homeowners in the United States, your neighbors, will overpay sixteen billion dollars this year alone due to commission based markup of their home loans? Most homeowners have never heard of the fee lenders pay for this markup known as Yield Spread Premium, let alone what it does to their monthly payments.

Avoiding Hidden Mortgage Markup

The good news is that you don’t have to be a personal finance guru to avoid unnecessary markup. I’m going to show you how to get as close to wholesale as possible when it comes to Jumbo Mortgage Rates. First of all, you’ll need a clear understanding of mortgage Yield Spread Premium (YSP). What is it? Simply put, YSP is a commission, fee, kickback, whatever you’d like to call it paid to the person arranging your loan for locking and closing with higher than necessary Jumbo Mortgage Rates.

I say higher than necessary because both the broker and the lender know the lowest interest rate your loan can be approved; however, the broker salivating in the corner knows that if he locks and closes higher he’ll get a commission from that lender for overcharging you. Here’s an example to illustrate how this works.

Yield Spread Premium in Action

Suppose for example, you are refinancing your California jumbo home loan for $500,000. Your broker charges you an origination fee for their work of 1.5% and quotes you at 6.5%. This means your monthly payment on a fixed-rate, thirty year home loan will be $3,160. This is a serious payment to meet every month. What you don’t know about this home loan is that the lender actually approved you for Jumbo Mortgage Rates at 6.0%, and the broker marked it up to 6.5% without telling you.

How can this be legal you ask? Changes to the RESPA laws in 2010 did not abolish Yield Spread Premium like many homeowners think, the law only requires brokers to disclose the fee they receive for it alongside the origination fee they are charging you. The problem is most brokers are very good at explaining away Yield Spread Premium. “Hey that fee isn’t coming out of your pocket, don’t worry about it.”

So what does this hidden insidious markup of Jumbo Mortgage Rates do to your monthly payments? If you had the jumbo mortgage rates you deserve at 6.0% your monthly payment on the same home loan would only be $2,997. That’s a difference $163 per month, $1,956 per year all because the broker took advantage of you. Don’t let it worry you too much, the good news today is that now that you know about Yield Spread Premium you can avoid paying for it.

You can learn more about avoiding this hidden markup of your Jumbo Mortgage Rates by checking out my free Underground Mortgage Refinancing Videos.
Here’s a quick sample that exposes the truth about this unnecessary commission known as Yield Spread Premium.

Mortgage Refinancing This Week

mortgage rates Mortgage Refinancing This WeekThe kitchen sink is what the Federal Government chucked at the mortgage crisis last week when they took over Freddie Mac and Fannie Mae. When the Feds take over private companies it’s a really big deal and is the one thing that could pull the economy out if its ongoing slump.

Here are several things you can expect to happen over the coming months following the government takeover of Fannie Mae and Freddie Mac.

The most notable impact is the recent drop in mortgage rates. You can expect rates to stay just over five percent for a thirty year fixed rate loan. This is due to the government backing of mortgage bonds which significantly lowers the risk to investors. Because mortgage backed securities have higher yields than treasury bonds you can expect investors to move money which will drive mortgage rates further down.

Falling mortgage rates and the new government backed security of mortgage bonds should also bring foreign investors back to the US bond market, specifically new government insured mortgage bonds. This will have a side benefit of slowing inflation and boosting our faltering economy.

There is one unfortunate aspect of the mortgage industry that the government bailout will not change and that is lender underwriting. Qualifying for a mortgage loan will continue to be tight; even more difficult for homeowners in need of Jumbo mortgage loans. Jumbo loans are not purchased by Freddie Mac or Fannie Mae and have not been positively affected by the government bailout.

There is some good news for jumbo mortgage holders. Mortgage lenders know there is money to be made in this market and are currently offering competitive rates for loans greater than $417,000. The bad news is that tight underwriting standards aren’t expected to change anytime in the immediate future.

If you are a homeowner with good credit looking to refinance your home mortgage there is no better time than the present. Mortgage rates are at all time lows and lenders are desperate for homeowners with a solid financial history. You can learn more about refinancing your mortgage without overpaying and avoiding junk fees by registering for the free mortgage videos available on this website.