As underwater homeowners continue to struggle to find mortgage relief one program offered hope, but resulted in disappointment among many. The Home Affordable Refinance Program was created to help homeowners lower their monthly payments and avoid foreclosure. However, the program wasn’t helping as many as hoped and Fannie and Freddie have had to go back to the drawing board. Now armed with HARP 2.0, Fannie and Freddie are hoping to provide what they originally set out to achieve.
The idea behind the newly revamped Home Affordable Refinance Program is to not only help homeowners, but make lenders more willing to participate and offer such assistance. The new program contains guidelines that are designed to benefit lenders as well, increasing their flexibility in lending.
The main focus: lower monthly payments. In order to do that that program has lowered the maximum loan value and eliminated the appraisal requirement, which previously required for homeowners to pay $400 or more dollars to have the home appraised before any refinancing application could be approved. The program is also extended eligibility to homeowners who are 30 or more days delinquent within the past 12 months.
The HARP 2.0 changes are set to take effect for refinancing loan application dated after December 1, 2011. The program will remain in effect until December 31, 2013.