HARP II Refinancing for Underwater Home Owners

If you are underwater with your mortgage (doesn’t matter how much), you may be able to qualify for a refi. This is for loans that are owned by Fannie Mae or Freddie Mac. Even if you make a payment to your bank. The loan had to have been put in place before June 1, 2009. You must also be current on your payments.

If your bank still services your loan, it may NOT own it. In fact, banks often collect the payments and service the loans long after they sell the loan to Fannie Mae, Freddie Mac, or another investor. Don’t assume the company in which you make your payments to owns your loan. In addition, you’re better off not calling your bank directly because the customer service rep may be clueless about whether or not your loan is still in the original lender’s portfolio. Not to mention the fact that you’ll be on hold for a long time. This is why you need to look into who actually owns your loan to see if you can qualify. You can do this by checking the Fannie Mae and Freddie Mac websites.

Here are the links to the Fannie & Freddie websites:

Once you have done that, you can go on to the next step. If your loan is indeed owned by Freddie or Fannie, you can look at what your refinance options are. That is, you can calculate how much it would cost to do the refi and how much money you would save each month. If your loan is small (under $100k), you may not stand to save a whole lot as the fixed costs of refinancing would not make it worth it. The higher the loan balance, the more money you can potentially save.

HARP II could result in less foreclosures in distressed real estate markets such as Las Vegas. This will keep housing inventories lower in the short run as homeowners will be able to make lower monthly payments, which will keep them in their homes longer.

This doesn’t mean that the market will turn around in the near future, however. There are many foreclosures in the pipeline as many conventional loans will not qualify for refinancing. This program is set to begin in March and will have some impact on the market.

Although it won’t be a miracle cure, it will have an impact on keeping the shadow inventory lower for a period of time. Many of the homeowners that were on borderline as to whether or not they would walk away from their home will now lean towards staying in the home. This will be good news for the most distressed markets.

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