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Can HARP revisions benefit South Florida residents?

Many of our readers in South Florida may be familiar with the government program known as the Home Affordable Refinance Program, or HARP. Under this program, which began in 2009, people who owe more on their homes than the homes are worth can refinance the associated mortgages through a more streamlined, efficient process.

Homeowners who find themselves in this position, which is commonly referred to as being "upside down," should also know that HARP recently underwent some revisions to make it easier for borrowers to refinance their mortgages with the banks. To be eligible to refinance a mortgage, borrowers must meet a few criteria:

  • The mortgage has to be backed by either Fannie Mae or Freddie Mac.
  • The borrower must be current on his or her payments.
  • And the loan must have originated prior to May 31, 2009.

With interest rates at historic lows, many Broward County residents would be wise to consider the program if they qualify.

The biggest revision to HARP is that a refinance of a mortgage will be considered even if a home is worth far less than what is still owed. Previously, there was a cap on the amount by which a mortgage balance could exceed the property value.

According to the Federal Housing Finance Agency, approximately 180,000 homeowners refinanced their homes under the HARP program in the first three months of 2012 alone. Refinancing to a lower interest rate can substantially reduce monthly mortgage payments.

With the real estate market in a persistent, nationwide slump, many of our readers may be interested in finding ways to lower their mortgage burden. In many cases, as long as a borrower avoids delinquent payments, relief is possible. But even if problems arise with a mortgage obligation, there are other viable options, such as seeking a loan modification to help the homeowner avoid foreclosure or other penalties.

Source: Sun Sentinel, "More homeowners refinancing under revised program," Paul Owers, June 10, 2012

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