However, Fannie Mae’s High LTV Refinance Option (HLRO) currently has no expiration date. Similar to HARP and FMERR, it’s a great loan option for underwater homeowners who don’t have enough equity earned in their home to qualify for a refinance.

Even though home values have risen in many areas of the country, there still remains plenty of people with underwater mortgages – meaning they owe more on the mortgage than their home is worth.

“It’s between 13 and 17 percent nationwide according to Zillow, National Association of Realtors, housingwire.com and other sources,” says Linda Weathers, loan officer at Security National Mortgage Company in Alameda, Ca. “It was considerably more than that, but home values have come back in many areas. Obviously, areas that are more desirable have built equity back faster than those not so desirable.”

That means there are still many people out there who either haven’t tried to refinance, have tried and failed, or just don’t know where to turn.

“I’ve been working with distressed homeowners now for about seven years, pretty much since the crash,” Weathers says. “Homeowners do have options such as working with their current lender or another lender who is participating in HARP.”

HARP (Home Affordable Refinance Program) started in 2009 as a government-sponsored program for homeowners to refinance from their high-interest rates, underwater mortgages and declining home values. HARP 2.0 came around two years later to help an even broader spectrum of homeowners in trouble.

To use HARP, there are certain conditions that have to be met, Weathers says:

• The home is an owner-occupied, investment, or vacation home of one to four units.
• The loan is owned or guaranteed by Fannie Mae or Freddie Mac, and it was originated before June 1, 2009.
• At the time you apply for HARP, you are current on your mortgage payments.
• Must be more than 80 percent loan-to-value (LTV). Some lenders are refinancing up to 300 percent LTV.
• It is for your first lien, not a second mortgage.

HARP ineligible? Here are other options

Not everyone is qualified to get a HARP loan. Many people are hoping that the government comes up with a HARP 3.0 version that would include a lot more people, especially people that didn’t have a mortgage that originated with Fannie Mae or Freddie Mac, or who bought a house after the June 1, 2009 cut-off date.

“Right now, there are no (government) programs for them. But through their current lender, homeowners can attempt a loan modification, forbearance plans or settlement,” she says.

Here are descriptions of these other refinancing options:

Settlement – Some second lien lenders are doing this, including her mortgage company. It is s basically a short payoff and then closing of the loan, Weathers says.

Forbearance – This is when your mortgage payments are reduced or suspended for a period you and your lender agree to, according to Federal Trade Commission’s Consumer Information website.  At the end of that set time, you begin paying your regular mortgage along with a lump sum payment or additional partial payments for a number of months to bring the loan up to date.

Modification – This is a permanent change in one or more of the loan’s terms and results in a payment the borrower can afford, according to the U.S. Department of Housing and Development website. The government offers HAMP, the Home Affordable Modification Program, designed to offer struggling homeowners who are struggling to pay their mortgage, or are already behind on their payments, a chance to reduce their monthly payments by offering lenders financial incentives for approving loan modifications. FHA and VA both have modification programs for those underwater, Weathers says.

“They basically all do the same thing – reset the term to 30 years from the new refinance date and may reset the interest rate. If there was mortgage insurance on the original loan, that insurance will also be on the new loan,” she says.

Her advice to those who are still underwater but can’t refinance for one reason or another is to try very hard to keep affording your payments.

“Stay current and eventually, the value will be more than the loan balance. Then, depending what interest rates are doing, it might make sense to refinance or not. Worry more about paying your mortgage off than when you can refinance,” Weathers says.

It’s a tough road for many that don’t have an outlet for refinancing, says Ken Schiff, mortgage originator at OJ Mortgage in Tampa, Fla. He truly believes that there are many people that could be helped if HARP 3.0 would be established. In fact, he meets these people all the time when he sets up his booth at home shows in Florida to explain HARP and other refinancing options to underwater borrowers.

“I now have a database of 1,200 people that don’t qualify for HARP 2.0, and they are waiting for something different from the government to help them out,” he says.

No HARP 3.0 equals stalled economy

A new program is not only needed for those who are underwater and can’t get help anywhere else, but he says it is needed to stimulate the U.S. economy even more.

“If people can’t see an increase in the value of their homes, they can’t put their homes on the market. If you can’t have home sales, the housing market is stalled, and that affects everyone,” he says.

Housing prices have increased in some areas, especially the ones that had been so damaged in the first place such as in Florida.

“But prices are not burgeoning like they used to be. Housing is such a key factor in our economy. We need to put more pressure on the government to allow more people to refinance,” he says.

For those that he does help refinance, it’s a great relief to the borrowers to have lower payments and more money each month.

“There could be millions of people with an extra $400 or more a month in their pockets if they could refinance, and others who would be able to put their houses on the market if they weren’t underwater anymore,” he says. “That’s a big domino effect.”

The post HARP 2.0 & Underwater Mortgage Refinance Options first appeared on My Mortgage Insider.

Plus, Fannie Mae’s High LTV Refinance Option (HLRO) currently has no expiration date. Similar to HARP and FMERR, it’s a great loan option for underwater homeowners who don’t have enough equity earned in their home to qualify for a refinance.

Updated Home Affordable Refinance Program (HARP 2.0) guidelines for 2024

The Home Affordable Refinance Program, or HARP, helped over 3 million American homeowners refinance into a lower rate and payment even though they owe more than their home is worth.

The real estate downturn of 2009 spurred the government to issue new lending guidelines to help people save money each month on their mortgages despite low home values.

Current 2018 HARP guidelines are as follows.

• The current loan must be owned by Fannie Mae or Freddie Mac.
• The loan must have closed by May 31, 2009.
• The current loan-to-value must be greater than 80% (your loan amount is 81%+ of the home’s value).
• No 30-day late payments in the last 6 months.
• No more than one payment that was 30+ days late in the past 12 months. (Some lenders may require no late payments at all in the last 12 months.)
• You can’t use HARP on the same property twice.

There are two different versions of HARP. The Fannie Mae version is called DU Refi Plus. The Freddie Mac version is called the Relief Refinance. These two programs are essentially the same for most borrowers. The loan program homeowners use depends on who currently owns their mortgage.

*New* HARP-like program starts January 1, 2019

FHFA has confirmed that a new HARP-like program will open up to homeowners starting January 1, 2019. The new program eliminates the requirement that the loan must have been opened on or before May 31, 2009. Instead, the loan note date must be on or after October 1, 2017.

This program is designed as a HARP replacement. As HARP gets repealed, then, this new high-LTV refinance will take its place.

Take note that the program still doesn’t allow homeowners to get a high-LTV refinance if their loan was opened between June 1, 2009 and September 30, 2017.

Guidelines for the new program, according to FHFA sources, are as follows.

• The loan being refinanced must be owned by Fannie Mae or Freddie Mac
• The refinance must provide a benefit to the borrower, such as a lower rate, payment, or shorter loan term
• An LTV of 95% or greater, and can be more than 100% of the home’s value
• At least 15 months have passed between the original note date and the refinance loan’s note date
• No missed payments in the previous six months
• No more than one missed payment in the previous 12 months
• You can use the program more than once as long as at least 15 months have passed between refinances
• HARP mortgage holders are not eligible
• Homeowners who have had a HARP mortgage, but have since refinanced out of it, are eligible

Until this program is rolled out, it is worth checking your standard HARP eligibility to take advantage of home payment savings now.

HARP refinance FAQ

Are HARP rates low?

HARP mortgage interest rates are as low or lower than standard conventional refinance rates that require 20% equity. This fact is why HARP has been such a benefit in today’s refinance market. Homeowners with no equity or even negative equity in their homes can get the same rate as someone with a lot of equity. This is possible due to strong government backing. Lenders have discovered this is a safe and stable mortgage product to offer to their customers. The HARP program is a win for everyone.

What is HARP 1.0, 2.0, and 3.0?

Harp 1.0 debuted in 2009. It allowed borrowers to refinance at up to 125% loan-to-value. Loan-to-value is the comparison between the loan balance owed and the value of the home.

Then the Federal Housing Finance Agency (FHFA), the entity that oversees Fannie Mae and Freddie Mac, determined that the 125% cap was too limiting. Many homeowners were still unable to refinance because their values had dropped so dramatically.

HARP 2.0 was rolled out by the FHFA on March 17, 2012. The new enhancement eliminated the loan-to-value cap for fixed-rate mortgages. With this move, the FHFA hoped to allow millions more American homeowners to refinance. The current HARP program has been extended to December 31, 2018.

HARP 3.0 was a possible enhancement to the HARP program that would eliminate some rules and allow more to qualify. However, HARP updates are unlikely to happen at this point, since the program is set to expire in 2018.

Do I Have to Use My Original Lender for a HARP Refinance?

No. Any lender already set up to do Fannie Mae and Freddie Mac loans can do a HARP loan, despite where the original loan was completed. In fact, you’ll probably get a better rate by shopping around.

Did Obama Waive Refinance Requirements?

A lot of rumors have been floating around that President Obama waived refi requirements, making millions more homeowners eligible. While the Obama administration is working toward waiving some requirements, there has been only a few changes to the HARP program since 2012. However, here’s one key change that happened since then:

On October 27, 2013, Fannie Mae and Freddie Mac changed the HARP cutoff date requirement slightly. Previously, the mortgage had to be sold to Fannie or Freddie on or before May 31, 2009 to be eligible.  This means you could have closed a mortgage at the beginning of May 2009, but be ineligible for HARP, simply because your lender did not sell the loan to Fannie or Freddie quickly enough.

Now, your loan just has to have closed by May 31, 2009, and you are eligible for HARP. If you purchased or refinanced in April or May of 2009 and have been denied for HARP before, try again now by completing a short online form to check eligibility.

What is “Loan-To-Value” and is there a maximum for HARP?

On a HARP loan, there is no maximum loan-to-value set by Fannie Mae or Freddie Mac. The exception is that Freddie sets a maximum loan-to-value of 105% when the new loan is an adjustable rate.

Loan-to-Value, or LTV, is the proposed new loan compared to the property’s value. For example:

• If the proposed loan is $150,000 and the property is worth $100,000, the LTV is 150%
• If the proposed loan is $150,000 and the property is worth $150,000, the LTV is 100%

Even though Fannie and Freddie don’t set maximums for fixed rate HARP loans, some lenders do. Some will HARP loans up to 125% LTV, and some to 200% LTV. Some banks may have higher limits or no limit at all. It’s up to the borrower to find a lender who will allow an LTV high enough to qualify.

I have a second mortgage. Can I use HARP?

The HARP program allows borrowers to refinance the first mortgage while a second mortgage is in place. Fannie and Freddie do not set a combined loan-to-value (CLTV) maximum. The CLTV is the total of all loans on the property.

• If the proposed loan is $150,000 and the second mortgage is $25,000, and the property is worth $100,000, the LTV is 150% and the CLTV is 175%
• If the proposed loan is $150,000 and the second mortgage is $25,000 and the property is worth $200,000, the LTV is 75% and the CLTV is 87.5%

HARP does not allow the borrower to pay off the 2nd mortgage with an increased 1st mortgage balance. The second mortgage must be subordinated behind the new first mortgage refinance. Subordinating is simply obtaining an agreement from the second mortgage owner to remain in second position after the new first mortgage is opened.

Keep in mind that subordination agreements can be difficult to get because second mortgage holders are reluctant to subordinate a loan at 200+% CLTV. However, second mortgage holders have been strongly encouraged by the government to approve subordinations so that the first mortgage can be refinanced.

In the past two years, more 2nd mortgage lenders are subordinating their loans without issue. Be prepared for long waits of two to six weeks, however, as lenders are inundated with subordination requests.

Can I wrap closing costs into the new HARP loan?

Yes. HARP allows you to wrap in closing costs, with limitations. Fannie Mae allows you to roll up to 4% of the existing loan balance in closing costs. Freddie Mac allows up to 4% of the existing loan or $5,000, whichever is less. If these limits are exceeded, the borrower will have to pay the extra amount in cash.

Can I receive cash back on HARP?

Both Fannie Mae and Freddie Mac limit cash back to $250. The exception is if the borrower pre-pays for any fees. Then the borrower would be able to receive $250 plus the amount they prepaid. Except in this scenario, any amount over $250 will need to be applied to the principle at loan closing (called a principal reduction), or by re-underwriting the loan with a lower loan amount.

Not all lenders will agree to do a principal reduction at closing. In some cases the loan amount has to be sent back through underwriting with a lower loan amount, causing delays.

What types of HARP loans are available?

A borrower may open a 15-, 20-, or 30-year fixed rate HARP loan. Also, 5-, 7-, and 10-year ARMS are available. However, if you have a fixed rate mortgage, you can’t refinance into an ARM.

Can my new HARP loan be an ARM?

You can refinance into an ARM loan if you currently have an ARM. For instance, you received a 10-year adjustable rate loan nine years ago and it is about to adjust. In this case, you can refinance into a new ARM with HARP. This will keep your payments lower than if you refinanced into a fixed rate. Many borrowers who have an ARM simply can’t afford the new fixed-rate payment.

The maximum loan amount for a HARP ARM loan is 105% of the home’s current value. Make sure your home is not too far underwater. Otherwise, you would have to opt for a fixed HARP refinance.

Can I get an interest-only HARP loan?

Fannie Mae stopped offering interest-only loans after the housing downturn. The only options for HARP are fixed and adjustable rate mortgages that are fully amortized, meaning full principal and interest payments are required.

Will I need mortgage insurance if I open a HARP loan?

One of the biggest benefits to HARP loans is that borrowers do not need private mortgage insurance (PMI), even though their loan-to-value is above 80%. However, if you have PMI now, you’ll have to keep it on your new HARP loan. The lender will take care of transferring your current PMI account to your new HARP loan.

Can I get a HARP refinance if I have mortgage insurance?

Yes. However, you’ll need to keep your existing PMI on the new loan. You can’t eliminate your current mortgage insurance payment by refinancing with a HARP loan.

Keeping your mortgage insurance requires the HARP lender to transfer your existing PMI. Not all lenders are willing to do that, however. If the lender won’t, the borrower should find a lender who does.

Can I refinance a rental property with HARP?

Fannie and Freddie allow HARP loans on primary residences, second homes, and rental properties, as long as the loans are owned by Fannie or Freddie, and meet the other criteria.

Are condos and townhomes allowed?

Yes. Since the condo or townhome was eligible for the original Fannie or Freddie loan, it is eligible for HARP. However, lenders may require a questionnaire from the condo association to prove it is not in pending litigation (has a lawsuit opened against it).

Will I need an appraisal?

An appraisal may or may not be required. The lender will run the refinance scenario through an automated underwriting system (AUS), a computerized system that determines loan eligibility. Part of the function of the AUS is to determine if the loan needs an appraisal or if the requirement for an appraisal is waived. The AUS makes this decision based on estimated value input by the loan officer, the geographical area, among other criteria.

Fannie and Freddie have updated their AUS systems as part of HARP 2.0 to allow for more appraisal waivers. However, there’s no way to tell if a borrower’s property will need an appraisal or not until the whole loan scenario is run through the AUS.

What is the maximum loan amount for HARP?

The HARP loan amount can be up to $766,550 in 2018 for a single family (1-unit) home. There are increased loan limits for properties with multiple units:

• 1-unit: $766,550
• 2-unit: $981,500
• 3-unit: $1,186,350
• 4-unit: $1,474,400

Higher HARP loan amounts are available in some areas. These loans are known as “Jumbo-Conforming” or “high balance” HARP loans. The below limits apply in areas where housing is more expensive, as determined by Fannie Mae.

• 1-unit properties: $679,650
• 2-unit properties: $870,225
• 3-unit properties: $1,051,875
• 4-unit properties: $1,307,175

Loans for properties in Alaska, Guam, Hawaii, and the Virgin Islands can exceed even these limits.

You can click on the below image for complete 2018 HARP loan limits by county.

What’s the difference between the servicer and the mortgage owner?

Your loan must be owned by Fannie Mae or Freddie Mac to qualify for a HARP refinance. But there’s a lot of confusion around what “owning” the mortgage means. There’s a difference between a mortgage servicer and the entity who owns your mortgage. The difference is as follows:

Servicer

• Collects monthly mortgage payments
• Distributes property taxes, homeowners insurance, and mortgage insurance to third parties appropriately
• Receives a small percentage of the mortgage interest to perform these services.

Mortgage Owner

• Entity that has ultimate rights to the mortgage and receives most of the interest
• May be a different entity than services the mortgage

Remember that homeowners never make their monthly mortgage payment to Fannie Mae or Freddie Mac. For instance, if someone pays Chase or Bank of America each month, the loan may still be owned by Fannie Mae or Freddie Mac. Fortunately, there’s an easy way to check if Fannie or Freddie own your mortgage

If your loan is owned by Fannie Mae or Freddie Mac, there’s a chance you could qualify for the HARP-alternative program.

What are HARP’s “Benefit to the Borrower” and “Net Tangible Benefit” requirements?

All HARP refinances have to demonstrate what’s called a Net Tangible Benefit (NTB), also called a benefit to the borrower. In simple terms, the refinance must put the borrower in a better financial position. Some examples of an NTB are

• Reduction in intert rate and payment
• Refinancing an ARM into a Fixed
• Refinancing a 30-year loan into a 15-year loan

Most borrowers are savvy enough to know when a refinance will benefit them. However, Fannie and Freddie require lenders to complete certain forms making sure the refinance pencils out to the positive for the borrower as an added protection.

What is an “AUS approval” and do I need it for HARP?

Your loan officer may say you need an automated underwriting approval. This can also be referred to as AUS approval. More specifically this type of approval can be called

• DU (Desktop Underwriter) approval for Fannie Mae loans
• LP (Loan Prospector) approval for Freddie Mac loans

These are proprietary computerized underwriting systems Fannie and Freddie have developed to analyze the borrower’s complete credit, income, asset, and property picture to arrive at a final decision on your loan. Real-life underwriters then verify the information that was input into these systems. You will be required to receive an “approved” response from either DU or LP, depending on who currently owns your loan. Without an “approve” recommendation from one of these systems, Fannie and Freddie typically won’t purchase the mortgage, so the lender will not close the loan.

Can I add or remove a borrower when I refinance with HARP?

Generally, as long as one of the original borrowers on the loan is to remain on the new loan, a borrower can be added or removed. Fannie and Freddie have additional requirements when adding or removing borrowers, such as

• The borrower staying on the loan may have more stringent qualification standards
• The borrower staying on the loan may have to show proof he/she has been making the payments for 12 months
• A borrower being added must plan to occupy the property

Can I pay taxes and insurance separately on my new HARP loan?

No. Paying property taxes and insurance with your mortgage payment each month will be required on the new HARP loan.

When does the HARP 2.0 program expire?

Recently, the Federal Housing Finance Agency (FHFA) extended the HARP program until December 31, 2018. Those who wish to use HARP to refinance still have time. However, there’s no telling whether interest rates will stay low enough to make refinancing worth it.

On January 1, 2019, a new HARP-like program begins. Fannie Mae and Freddie Mac loan holders will be able to refinance even if their LTV is over the standard Fannie/Freddie limits.

How do I know if I’m eligible for HARP?

The best way to find out if you qualify is to complete a short questionnaire here. In just a few minutes you’ll have access to your eligibility status and today’s HARP-alternative rates.

The post Complete HARP Refinance Rates & Guidelines | Updated for 2024 first appeared on My Mortgage Insider.

However, Fannie Mae’s High LTV Refinance Option (HLRO) currently has no expiration date. Similar to HARP and FMERR, it’s a great loan option for underwater homeowners who don’t have enough equity earned in their home to qualify for a refinance.

The government organization that oversees the popular HARP refinance has extended the program by one year. Homeowners now have the chance to refinance their underwater mortgage until December 31, 2016.

The previous deadline of December 2015 started to loom large for homeowners who had not yet tried or were not yet able to qualify for HARP. The program was extended with just over six months of life remaining.

Underwater homeowners now have over 18 months to take advantage of nearly record low current mortgage interest rates.

What Is HARP?

HARP stands for Home Affordable Refinance Program. It allows homeowners to refinance into today’s lower rates even if they owe more on their home than it’s worth. Most homeowners know this situation as being “underwater”.

After 2008, home prices plummeted. Millions of families bought homes they assumed would hold value. Historically, home prices have gone up, not down. A house is typically an appreciating asset, unlike a car, bicycle, computer, or just about any other purchase.

With this mentality, homeowners bought up homes only to see values drop almost overnight. The housing market had become too speculative, and lending was too loose.

People financed nearly 100% of their home’s price and often opted for loan products for which only interest was due. Home prices dropped and families everywhere suddenly owed more – sometimes a lot more – than their home was worth.

Enter the government. Mortgage finance giants Fannie Mae and Freddie Mac were taken over by the federal government who quickly mandated them to remove some hard and fast lending rules.

For all of home lending history before HARP, the borrower could not get a home loan if they owed more on their home than it was worth. A bank or lender would have laughed an applicant out the door if they requested a $200,000 loan on a $100,000 property.

But that’s exactly what the government allowed banks to do.

With HARP, homeowners now have access to low rates, enabling them to lower their monthly payments and stay in their homes. To qualify for the program, homeowners must meet the following guidelines:

• The current loan must be owned by Fannie Mae or Freddie Mac.
• The borrower must owe more than 80% of their home’s value.
• The current loan has an original closing date on or before May 31, 2009
• The borrower can’t have any payments 30+ days late in the last 6 months.
• Borrowers can’t use HARP on the same property twice.

Homeowners who have not yet taken advantage of the program can get a free quote and check their eligibility online.

600,000 Homeowners Still Haven’t Used HARP

The Federal Housing Finance Agency, or FHFA, estimates more than 600,000 homeowners could benefit from HARP, but simply haven’t used it yet.

Here are some of the common reasons families have not used HARP in the four years it has been available.

Some Homeowners Still Don’t Know About HARP

There are numerous government programs going on simultaneously to help with the housing recovery. Many of these options target homeowners at risk of losing their homes due to delinquent payments.

Some homeowners assume HARP is this kind of program.

Quite the contrary, HARP is only for homeowners who have not been late on any payments over the last six months. Homeowners must have a good credit score, typically 660 or higher. In addition, HARP applicants must have adequate income to support the new, lower payment.

In short, homeowners must qualify for all other aspects of a traditional refinance, except in regards to their home’s value.

Families are Recovering from the Housing Meltdown

When housing prices dropped in 2008 and 2009, it did not just affect housing. A system-wide spiral occurred in which people lost jobs, bills went unpaid, non-essential buying stopped, which led to more lost jobs.

Millions suddenly could not pay their credit cards, auto loans, and of course home loans.

Missing just one payment on a single credit account can drop a credit score by 100 points or more. Those who had multiple accounts in arrears saw their credit scores crop from 700-800 down to the 400s.

A score below 600 can take years to rebuild.

The good news is that the economy has rebounded. Families are getting back to work and rebuilding their credit profiles. This is why the one-year extension on HARP is so valuable. Many families need the extra time to improve their credit scores enough to qualify for HARP. Better credit causes a virtuous cycle. Borrowing costs go down, leading to more manageable monthly expenditures, again leading to fewer credit mishaps. A lower house payment, thanks to a good credit score, is the single most important factor to improving a family’s budget.

Procrastination and Fear of the HARP Process Trump Potential Benefits

Some people are natural procrastinators. They know they can qualify for HARP and have even watched rates drop. They know they can save $200+ per month, but have just “not gotten around” to pulling the trigger.

There’s probably nothing I can say that will persuade them toward action. So I won’t say any more except that rates are now on the rise. Even though HARP is extended until 2016, there’s no guarantee rates will stay low enough to make the refinance pencil out.

Still others are afraid of the refinance process. There will be too much paperwork and the lender will hassle them endlessly.

Nothing could be further from the truth.

Lenders are eager for HARP business. Typically there’s no appraisal required, and most applicants only need to provide a paystub, W2 and a few other pieces of documentation. The approval process is not only easy, but quick.

Whether out of procrastination or fear, homeowners owe it to themselves and their families to get motivated before rates rise. If rates increase too much, HARP becomes an existing but useless program.

HARP 2016 Extension Now In Effect

The extension is a done deal. Homeowners can use HARP until the end of 2016.

But there’s no reason to take that long to use the program. Once rates rise too much, the extension won’t matter. Get started on your HARP refinance.

The post 600,000 Homeowners Could Benefit from 2016 HARP Extension first appeared on My Mortgage Insider.

Four Big Ideas to Make HARP 3.0 a Reality

HARP 3.0 could turn out to be the most helpful refinance program in history.

Now if it could only make its way through Congress.

This legislation, also known as S.249 or the Responsible Homeowner Refinancing Act of 2013, is still in committee after trying to make its way through Congress since early 2013.

Current HARP 3.0 Bill Missing Key Element

Even if this bill were signed into law, it would be missing a vital aspect that would keep millions from participating in HARP: it would not allow non-Fannie Mae and non-Freddie Mac loans to participate in the program.

So anyone with a jumbo loan, Alt-A, or Subprime, or any loan kept in a private banks’ portfolio, would still be locked out of refinancing.

Allowing these loans that are not owned by the government-sponsored enterprises, or GSEs, is essential to any successful HARP 3.0 program.

But Congress is not likely to pass such an allowance because of risk to the GSEs. Here are some ideas that would make sweeping HARP 3.0 legislation a real possibility.

Big Idea #1: Add a Funding Fee to HARP 3.0 Loans

It’s a major gamble for Fannie Mae and Freddie Mac to refinance loans they don’t already own. They’re already on the hook for loans they made in the past, but not for non-GSE loans.

That’s why a new HARP bill should allow non-GSE loans to participate, but require these loans to pay an upfront funding fee. This fee would pay for any increased loan defaults Fannie and Freddie would experience.

Government-backed loans already take this approach. Veteran’s Administration (VA) loans require a 2.15% upfront funding fee. Federal Housing Administration (FHA) loans require a 1.75% upfront fee.

If the same idea were implemented for non-GSE HARP loans, the fee could help fund an insurance pool that would pay for HARP 3.0 foreclosures. Mortgage insurance has been a proven method to offset risk for lenders for decades.

This fee could range anywhere from two to three percent of the loan amount and it could be rolled into the loan amount so it would not add to cash the borrower would need to bring to closing. If HARP 3.0 paid for itself, members of Congress could only look good by attaching their names to it.

Big Idea #2: HARP 3.0 Test Markets in 2024

What do corporations worldwide do when introducing a new product? They test it in certain markets.

If the product performs well in representative areas, it’s assumed it will work on a larger scale.

The same idea could be put into practice with HARP 3.0. The legislation could require tests in key areas, such as Phoenix, Arizona, Miami, Florida, and Los Angeles, California. The program would have to prove sustainable in these aspects:

• There are a manageable number of defaults
• The loan program breaks even or is profitable
• There is adequate participation
• Homeowners are successfully reducing their payments and getting into fixed-rate loans.

The idea of a test run has already been implemented in Oregon, with a program nicknamed the “Merkley Mortgage” after Senator Jeff Merkley (D-Ore.), who introduced the idea. This loan program offers a refinance to any homeowner, despite who owns their loan. It has already been expanded from just one county to three.

If Congress is willing, a HARP 3.0 test could follow the same pattern and could be rolled out nationwide, perhaps even in 2014.

Big Idea #3: Place Loan-to-value Limits on Non-GSE HARP 3.0 Loans

One way to limit risk of the new non-GSE loans added to Fannie and Freddie portfolios would be to set up loan-to-value limits.

For instance, if the loan-to-value limit were 150%, a homeowner who has a home worth $100,000 could refinance up to a $150,000 loan amount. But if the homeowner needed a $175,000 loan, they could not do the loan – yet.

Admittedly, this requirement would block the most severely underwater homeowners from participating. But the idea would be to remove the loan-to-value (LTV) limits after time. We saw this occur once already, when HARP 1.0 changed to HARP 2.0. The LTV limits were removed and many more homeowners became eligible.

And with property values increasing by double digits in many areas, LTV limits may not be as restrictive as they once were.

Big Idea #4: Set Up a Buyer Database to Quickly Sell HARP 3.0 Foreclosures

Inevitably, the HARP 3.0 program will produce extra foreclosures on the GSE’s books. But that shouldn’t deter Congress from offering the program. Fannie Mae already has a website dedicated to selling its foreclosed properties, called HomePath. Freddie Mac’s version is called HomeSteps.

Why not add a form to these websites where interested buyers could request updates as new properties become available? And, a marketing campaign could be launched to increase awareness of these discounted GSE properties.

The quicker the GSEs could get rid of foreclosed HARP 3.0 properties, the more attractive legislation might be to lawmakers.

Congress and Homeowners Would Benefit

It’s perfectly understandable that lawmakers are a bit anxious about HARP 3.0. After all, no one wants their name on a law that has the potential to cost taxpayers. Nor do we want a repeat of the recent housing crisis.

Yet HARP 3.0 could potentially help millions of homeowners get into fixed rate loans while lowering their payments. This would be a boon for the economy as billions of dollars would be redirected from mortgage payments to other spending and saving.

Tell your Representative

It’s fairly easy to write to your Representative and tell him or her your desire to see HARP 3.0 happen. Simply go to the House of Representatives website and enter your zip code. Then copy and paste the below message to the member of Congress who represents your area:

Message Subject:

Four Big Ideas to Help a HARP 3.0 Law Pass in 2014

Message:

Dear Representative (Rep’s last name):

I’m concerned because many homeowners in my area still can’t refinance with HARP because their loans are not owned by Fannie Mae or Freddie Mac.  Please consider sponsoring a bill that would allow the Home Affordable Refinance Program (HARP) to accept non-GSE loans. Here’s how we could make the program work:

1) Require a funding fee for non-GSE loans that would help pay for the program; 2) Roll out the new HARP rules in select markets until it proves to be a viable program; 3) Set temporary loan-to-value limits on non-GSE loans to limit risk; 4) Establish an awareness campaign and buyer database to quickly sell any additional foreclosures caused by the new HARP rules.

Sincerely,

(Your name here)

HARP 3.0 Could Happen in 2024

With enough input from the public and some good practical ways to make it happen, members of Congress could pass a HARP 3.0 law. With the right legislation, HARP 3.0 could make Congress and homeowners very happy in 2014.

The post Here’s How We Can Make HARP 3.0 Happen in 2024 first appeared on My Mortgage Insider.

Q: If my mortgage is not owned by Freddie Mac or Fannie Mae, can I still get into the HARP program?

I got into my home before everything went south in the job and housing markets and received a rate higher than is offered with HARP. But my loan isn’t a Fannie Mae or Freddie Mac loan. It kind of sucks knowing that I’m probably paying $300 more a month than I would have to if I could use this program.

—Ed K.

A: You have a great question, Ed – one that thousands of homeowners across the country are asking. And I wish I could answer it differently than I have to. However the rules state that your loan has to be owned by either Fannnie Mae or Freddie Mac to be eligible for the Home Affordable Refinance Program, or HARP.

However, that’s not to say that HARP rules will never change. In fact, opening up the program to everyone is one of the big changes I’m hoping for in 2014.

Instant help: Get a HARP-alternative program rate quote and see if you’re eligible.

This change to the program would be called HARP 3.0.

A little HARP history: HARP 1.0 allowed underwater homes to refinance, but only if the loan balance was at 125% or less of the home’s value. Then HARP 2.0, the current program, was rolled out. HARP 2.0 does not have a limit to how underwater the home can be. But with HARP 2.0, it still has to be a Fannie or Freddie loan.

What many in the industry, including me, are hoping for in 2014, is that HARP 3.0 will be rolled out. This program would allow countless underwater homeowners who don’t have a Fannie or Freddie loan to refinance into today’s rates.

Millions of homeowners in the last decade used home loans that did not comply with Fannie or Freddie guidelines. Some examples of popular loans back then were:

• Alt-A loans
• Subprime loans
• Stated Income and stated asset loans
• Washington Mutual option ARMs
• Wachovia and World Savings option ARMs
• Countrywide PayOption ARMs
• NINJA loans (No income, no job or assets)
• Some types of interest-only loans

Just about everyone who used one of these loans ended up with sever negative equity, because most of these loan types did not require a payment to the principal loan amount. Then when home values crashed, many homeowners quickly found that they owed more than double what their home was worth.

Instant help: If you’re not sure if you’re eligible for a HARP-alternative, call a knowledgeable expert to find out.

But not all of these homeowners defaulted on their loans. To this day, many are paying their loans faithfully, in hopes of some help. I gather, Ed, that this is your situation, and I applaud your perseverance when so many have defaulted on their home loans during the housing crisis.

Is HARP 3.0 coming soon?

What I can say is that many in the industry are pushing for the Federal Housing Finance Agency, or FHFA, the agency that oversees Fannie and Freddie, to change HARP and allow faithful homeowners like you to take advantage of the same benefits that Fannie and Freddie loan holders have enjoyed.

There are many feasible ways to make this happen, as I discuss in my article “Here’s How We Can Make HARP 3.0 Happen in 2014.” One real option is to roll out HARP 3.0 changes slowly, which could result in a program called HARP 2.1 or HARP 2.5.

However it might happen, I welcome any positive changes to the program so we can see HARP 3.0 become a reality before rates rise too much. I want to see people who opted for less-than-ideal loan terms upwards of 10 years ago finally see some mortgage relief, start building equity, and get into long term loan types. People like you, Ed, deserve an affordable home for years to come.

The post Can I Refinance with HARP if My Mortgage is not a Freddie or Fannie Loan? first appeared on My Mortgage Insider.

However, Fannie Mae’s High LTV Refinance Option (HLRO) currently has no expiration date. Similar to HARP and FMERR, it’s a great loan option for underwater homeowners who don’t have enough equity earned in their home to qualify for a refinance.

The Obama refinance is one of today’s most powerful tools available to you as an underwater homeowner. But there’s a lot of confusion around the program so let’s take it from square one.

I’ve Heard of the “Obama Refinance” but What is It?

What’s commonly known as the Obama refinance or Obama mortgage has an official name: the Home Affordable Refinance Program, or HARP.

(Disclaimer: This is not a government site or blog post. We aim to explain this government-sponsored program. Visit the official government site for more information on the Obama administration’s refinance initiatives.)

The most useful aspect of HARP is that you can refinance even though you owe more than your home is worth, or in other words, you’re underwater. Most lenders now allow your new HARP loan amount to be as much as double what your home is worth.

This is a refinance feature that has never been allowed prior to the HARP program.

Another useful feature of HARP is that you can refinance if you have some equity, but don’t have enough to refinance. In fact, anyone with a loan-to-value ratio of 81% or more can use the program (meaning your loan balance is 81%+ of your value.)

You can use HARP on your primary residence, investment properties, and even second homes

So how do I Qualify for the Obama Refinance?

Here are some requirements:

• Your loan must be owned by Fannie Mae or Freddie Mac. (To see if Fannie Mae owns your loan, go here. Check Freddie Mac here.
• Your loan has to have closed on or before May 31, 2009.
• Typically you can’t use HARP on the same property twice.
• You must have made your payments within 30 days of the due date for the past 12 months. (Some lenders allow you to have 1 payment that was 30+ days late if it was more than 6 months ago.)
• You have to have a decent credit score (usually 640-660+).

For more extensive program details and Q&A, see our HARP page.

Fannie and Freddie don’t own my Mortgage. Is there a Loan for That?

The Obama administration is pushing forward a refinance plan to help homeowners whose loans aren’t owned by Fannie Mae or Freddie Mac. The new program has gone by many names, from HARP 3.0 to #MyRefi to “A Better Bargain for Homeowners.” Unfortunately, it’s not available yet.

Many variations of a new HARP program have been introduced in Congress but none have passed or been signed into law. This is frustrating for the millions of homeowners who have Jumbo loans, option ARMs, Alt-A loans, subprime, or any other loan that wasn’t acceptable to Fannie or Freddie.

So will features of the Obama refinance program pass soon, or at all?

I have to admit that the jury is still out. There have been promising signs of an updated HARP program, such as the confirmation of Mel Watt as the new director of FHFA, the President Obama’s comments in an interview with Zillow last year, and a HARP 3.0 test currently available in Oregon. However, there is no timeline for when a new underwater home loan program will be available.

Still, don’t give up hope. Just small incremental changes to the Obama refinance program could mean big savings to homeowners who have been locked out of refinancing since the housing crisis began.

You can get involved. See our article on How to Make HARP 3 Happen.

Possible Changes if the Obama Refinance Plan is Implemented

If the current Administration gets its way, we could see big changes to the current HARP program.

HARP started out as a little-known and little-used refinance type in 2009 – you couldn’t refinance if you had a loan-to-value (LTV) of 125% or more. And many lenders wouldn’t allow anything over 105% LTV.

Then in 2012, HARP 2.0 was rolled out, which removed the LTV cap, and did away with the need for an appraisal in many cases. This is the current program, and has helped over 3 million homeowners to date.

A revised refinance plan could have these features:

• Any loan would be eligible, whether or not it’s owned by Fannie or Freddie.
• If you’ve used HARP once, you could use it again.
• It could remove the May 31, 2009 cutoff date so those who purchased or refinanced afterward could use HARP.
• Reduced income documentation requirements.
• Lower credit score requirements.

These are just some of the changes that could come about due to refinance initiatives the Obama administration is trying to push forward.

Can I Refinance Without a new Obama Refi Program?

Home values have risen as much as 25% over the past year in some areas of the country.

Why does that matter?

It means your value may have increased enough to consider a standard refinance, outside of special government-sponsored programs.

For instance, if you owe $200,000, and your value was $200,000 last year, your new value could be $240,000 now assuming 20% appreciation. That puts you in range to use a standard conventional refinance.

Even if your new loan amount is over 80% LTV and you have to have private mortgage insurance (PMI), you might find that your payment still drops.

And, you can cancel PMI when your loan amount drops to 80% of your current value.

How Do I Find Out if I Qualify for the Current HARP Program?

If you’ve been denied before, you could be approved this time around. While there are standard HARP rules, lenders impose their own rules and often make the program more restrictive. You could be approved just by inquiring at various lenders.

By completing this short online questionnaire that takes 60 seconds, you will be matched with lenders who will look at your situation on an individual basis and determine if you qualify.

You could be very surprised that you qualify, even without HARP program changes. It’s possible you could be just minutes away from finding out you can save money every month with a refinance.

The post Everything about the Obama Refinance Program and How to Qualify first appeared on My Mortgage Insider.

However, Fannie Mae’s High LTV Refinance Option (HLRO) currently has no expiration date. Similar to HARP and FMERR, it’s a great loan option for underwater homeowners who don’t have enough equity earned in their home to qualify for a refinance.

A HARP refinance is just one option. There are other ways to get help with your mortgage payments, but you might need to think outside the box.

Q: My wife and I are seriously upside down due to the economy. We paid $530,000 for our current home about 6 years ago right before the crash. Our home is now valued in the mid to upper 300,000’s. We are so upside down and I don’t see any relief anywhere.

We need to lower our mortgage payment badly. It is at $3,000 per month and our loan is not Fannie Mae or Freddie Mac so we DO NOT qualify for a HARP which is sooo disappointing in our situation. I will be retiring in less then 6 years and I have to have a better situation or we will have no choice but to walk away. I don’t see any other way at this point unless we can refinance at a lower rate that is more in line with today’s rates.

We have never missed a payment on our mortgage but we are seriously strapped and barely hang on all the time.

What are our options? There has to be something that can be done here and it doesn’t seem fair that we can’t be involved in a refinance with HARP just because of the type of loan. What do you suggest my friend?

–Bill

There are so many people in your situation right now. I think that’s why so many are calling for sweeping changes in HARP – often referred to as HARP 3.0. There is a bill in Congress now, but I would call it more like HARP 2.1 instead of HARP 3.0. This is because it reduces costs on HARP and would allow people to qualify without proving employment – but the program is still only available for loans owned by Fannie/Freddie (the GSEs). Also, it doesn’t look like this bill will pass.

Here are my suggestions at this point:

1. Contact your elected Representative and tell them that a sweeping bill needs to pass in Congress, allowing non-GSE loans to be eligible for HARP.

2. Explore MakingHomeAffordable.gov for programs you may qualify for. HARP is just one of the government programs available now. Here are a few examples:

• HAMP – This is a modification program that allows some to reduce their mortgage payments. Apply by contacting your servicer.
• UP – This program may allow you to suspends or reduces your monthly payment until you can find your next job.
• Hardest Hit Fund – This is special allocation to 18 states and the District of Columbia to assist homeowners who live in the areas hardest hit by the housing crisis. Your state may have special programs available. One example is a HARP 3.0-like program for Multnomah County, Oregon residents.

3. Call your existing servicer. Even if they don’t participate in any of these government programs, they may have modification programs of their own. Many servicers would rather reduce your principle or interest rate than deal with the foreclosure.

4. Rental markets are getting stronger. In the next 6 years before you retire, rent out the home at or close to your current mortgage payment. Once your payment is covered by the renter(s), you’re free to downsize your own housing payment.

5. If it’s a big home and you have extra space, think about remodeling part of the home into a mother in law unit. Then, rent out this portion of your home. If you don’t have money for the remodel, invite a (trusted and pre-screened) boarder to live in a spare room, family style.

6. Wait for values to come back, and sell or refinance at that time. Believe it or not, the housing market is on a rebound and many states are seeing double digit appreciation.

I know none of these are the quick-fix that HARP could offer. But, they are some ideas you can experiment with. With a little creativity and some luck, you may be able to get help with your mortgage payments even without HARP.

The post I Need Lower Mortgage Payments but I’m not HARP Refinance Eligible first appeared on My Mortgage Insider.

However, Fannie Mae’s High LTV Refinance Option (HIRO) currently has no expiration date. Similar to HARP and FMERR, it’s a great loan option for underwater homeowners who don’t have enough equity earned in their home to qualify for a refinance.

Refinancing when you have a second mortgage can be done; preparation helps.

How do I refinance a conventional loan I obtained with a mortgage instrument formally known as an 80/20 loan (80% first mortgage and 20% second mortgage)? We have tried to sell the home but have had no luck. We are underwater. We want to lower our monthly payment until the market allows us to swallow a loss or to break even.

— Odie from Texas

You’re in a very common predicament. Many bought a home with an 80/20, as it was a great way to buy a home with zero down. However, now it’s proving hard to refi one or both of the loans.

Your best bet is HARP. For a complete guide, see our HARP page.

The first step to HARP is to check if your current first mortgage is owned by Fannie or Freddie. If so, there’s a good  chance you can qualify for HARP. Check your loan at both of these sites:

• https://www.knowyouroptions.com/loanlookup
• https://www.freddiemac.com/corporate/

Your best strategy is to refinance the first mortgage and keep your 2nd mortgage open. Hopefully your 2nd mortgage has a small enough balance so that you can work toward paying it off instead of refinancing. There is no HARP-like refinance program for 2nd mortgages, and your total loan compared to the value of the home is probably way too high for any bank to approve the second mortgage refinance.

You’ll need to subordinate the 2nd mortgage under the new HARP refinance. Subordinating is basically getting a document from the current 2nd mortgage holder saying they agree to go back into 2nd position when the new 1st mortgage is complete. Your lender will take care of getting this for you.

Lately, second mortgage lenders have been pretty good about subordinating their loans behind underwater HARP refinances. When HARP first came out, second mortgage lenders often denied subordinations because the loan-to-value was too high.

If your loan is not Fannie- or Freddie-owned, this will be a hard refinance to complete. It would be completely up to the owner of the loan as to whether they will offer you a refinance option.

Hope this helps, and thanks for asking.

The post How Do I Refinance with HARP when I have a 2nd Mortgage? first appeared on My Mortgage Insider.

Additionally, Fannie Mae’s High LTV Refinance Option (HLRO) currently has no expiration date. Similar to HARP and FMERR, it’s a great loan option for underwater homeowners who don’t have enough equity earned in their home to qualify for a refinance.

The Home Affordable Refinance Program, or HARP has helped millions of underwater homeowners.

But millions more are not eligible because their loan is not owned by Fannie Mae or Freddie Mac.

Still others are not eligible for HARP because they

• have used HARP before on the same property
• closed their loan after May 31, 2009
• have more than one late mortgage payment in the last 12 months.

There are other refinance options available when you think outside the HARP box.

“Cash-in” Refinancing

Most homeowners have heard of a cash-out refinance. It allows those with equity in their homes to receive cash at closing.

A cash-in refinance is the opposite. The homeowner puts cash into the transaction to close the loan because they don’t have enough equity.

This type of loan doesn’t sound like a good deal on the surface, but it can work out in the homeowner’s favor.

Here’s how. Say you could save $350 per month by refinancing. But you are $10,000 short on equity and not HARP eligible. You could take $10,000 from another source to complete the refinance.

Once you have enough cash, a myriad of loan types are available. You are no longer stuck in the HARP-ineligible jail cell. Fannie Mae, Freddie Mac, FHA, and VA refinance types suddenly become real options for reducing your high mortgage interest rate.

Eligible Sources of Funds for a Non-HARP Cash-in Refi

The biggest hurdle with a cash-in refinance is where to get the cash. It might not be as hard as you think.

The funds could come from a number of sources.

A personal loan or line of credit

Local banks and credit unions offer personal lines of credit. These are not attached to your home but are unsecured loans meaning you don’t need an asset as collateral.

Just remember you’ll need enough income to qualify for the line of credit and refinance loan.

A current investment or savings account.

Do you have a savings account making a dismal one half of one percent interest per year? Why not make money by saving money on your monthly home payment instead?

Instead of making $50 per year in interest, you could be saving hundreds of dollars per month.

Sale of an asset like a car

Obviously you need a car to work. But many people have way too much equity tied up in a car. It might be worth it to sell the vehicle, buy a more modest one, and use the net proceeds to refinance. It’s a sacrifice, but one that will lower your bills and make you more financially healthy.

A gift from a relative

You can receive a cash gift to make up the gap between your loan and negative equity. It’s a lot like raising funds for down payment to buy a house. Gift funds can come from the following sources.

• A spouse, child, or legal dependent.
• Another relative who is related by blood, marriage, adoption, or legal guardianship
• A fiancé, fiancée, or domestic partner.

Be sure to follow the guidelines for gift funds as outlined here.

How a Cash-in Refi can Pay Off

While it may sound like you’re robbing Peter to pay Paul, the numbers can work out surprisingly in your favor.

Let’s look again at the scenario in which you could save $350 per month by coming up with $10,000.

You’re going to make just a fraction of that amount in interest each month by keeping the cash in savings.

Likewise, your monthly cost for a $10,000 unsecured line of credit would be much less than $350 per month. If you assume a payment of $100 per month for a small loan, your net savings is still $250 per month.

A refinance lowers the interest on your entire loan balance. You’re leveraging a small dollar amount to reduce interest on a very big loan. That reduces overall strain on your budget.

A cash-in refinance is definitely worth a back-of-the-napkin calculation to see if it pencils out.

If you can come up with the cash to make up your negative equity, one of the many non-HARP refinance options become available to you.

Non-HARP Cash-In Refinance Types

If you make up your negative equity with cash, here are your refinance options:

FHA Refinance

• Refinance up to 97.75% of the home’s current value with a standard FHA refinance.
• Can refinance a loan that is not eligible for HARP.

Check your FHA eligibility here.

VA Refinance

• Adequate military service required.
• Can refinance out of any loan type up to 100% of the home’s current value.

Conventional Fannie Mae or Freddie Mac Refinanance

• Need 3-5% equity or cash-in to refinance.
• Requires mortgage insurance.

Cash-in Refinance Benefits

If you’re not sure if you can make a cash-in refinance work, it’s a simple as getting a hold of a lender who can work the numbers out for you.

Once you have all the facts, see if the refinance will benefit you, or if you should wait for your home’s equity to go up enough to refinance without any cash.

The post Compelling Option for HARP Ineligible Homeowners: Cash-In Refi first appeared on My Mortgage Insider.

Dear Tim,

I would like to give you a “short synopsis” of where we are with our mortgage.  Wells Fargo is our lender, paying 7.5% interest rate, our home is worth around 160k but we still owe 188k, underwater.  We are unable to refinance because our credit is shot from balancing who we are going to pay this month.

We are current with our mortgage and have been for over a year.  I took a pay cut around 3 years ago, tried a few times for modification, unsuccessfully, because we “were current and not in imminent danger of foreclosure”.

Our mortgage is not Fannie or Freddie owned and we were also unable to be included in the mortgage settlement because we were told Wells Fargo didn’t own our loan but is the servicer.  I have contacted Wells Fargo upper management, my senator, attorney general, and alderman. I am usually passed along to someone else – HOPE, HAMP, making home affordable, etc.

I have been waiting since 2011 for some progress with HARP 3, with a folder FULL of correspondence back and forth with Wells Fargo about half a foot thick.  I am wondering since you ARE the mortgage “expert,” if there are ANY options for homeowners like us?

I believe around four of our neighbors’ homes are short-sales, two walked away within this past year and another next door to us is being foreclosed on.  We are struggling financially.  ANY advice, news, etc. I would sincerely appreciate it.  We have just about run out of options.

-Tracy

Hi Tracy,

Your story is all too common across the country. I’m sorry to say there aren’t many options right now. HARP is still only for Fannie/Freddie loans and there hasn’t been much progress on HARP 3.

But you are doing the right thing in keeping up with the mortgage payment at all costs. If any programs do arrive, they will only be for people who have made all their mortgage payments.

While there aren’t a lot of options, it’s not to say there zero options! Here are a couple ideas I had off hand:

1. You can use FHA to refinance up to 97.75% of your current value, even if you don’t have an FHA loan now. If your value does rise to 190k or so, this could be a real possibility. How did you determine your current value? It could be higher than you think. I would advise calling a local real estate agent to get their opinion. Typically they can give you a pretty good estimate of value for free, and you don’t have to spend hundreds of dollars on an appraisal. With all the short sales around you, it’s not helping your value, but you never know. Values have been increasing across the country, and you might be surprised.

2. If any owner on your home has military experience, you might be able to refinance with a VA cash-out loan up to 100% of current value. So as your home climbs toward your $188,000 value, this could be a real possibility.

3. My only other thought is hopefully your state will do something similar to what Oregon did – they rolled out their own HARP 3 program without Fannie/Freddie approval or Congress. It’s pretty incredible what they did. Oregon senator Jeff Merkley created a fund using federal Hardest Hit Funds that Congress allocated to states hardest hit by the housing crisis. What a great use of these funds. If other states would create similar HARP 3-like programs, we would see a lot fewer people in your position.

I would just encourage you to hold on and keep making your payment. I’m confident something will happen eventually, it’s just a matter of when.

The post We Are $30,000 Underwater and Not HARP Eligible. What Are Our Options? first appeared on My Mortgage Insider.