President Obama is extending the 2009 Home Affordable Refinance Program (HARP) with new mortgage rules. Obama spoke to supporters in Las Vegas, NV on Monday about the plan.
4 Points Of Obama's New Mortgage Rules
- No appraisals
- No extensive underwriter requirements
- Mortgage must be current
- Fannie Mae and Freddie Mac will waive fees
No matter how far underwater you are on your current mortgage, you will still qualify for a refinance.
No Extensive Underwriting Requirements
Even if you have less than perfect credit, you will still qualify.
Mortgage Must Be Current
One missed payment within the past six months makes you ineligible. Even if your lender told you to stop making payments, you are still ineligible.
Fannie Mae and Freddie Mac Will Wave Fees
Your loan must be owned by Freddie or Fannie in order to qualify at all under this plan. The loan has to have been sold to Fannie or Freddie before June, 2009. Find out if your loan is owned by Freddie Mac or Fannie Mae prior to signing up for this new plan. Fannie and Freddie will waive some of the fees associated with closing to reduce the cost of refinancing.
Many people had trouble meeting the strict qualification of HARP. According to CBS MoneyWatch, an estimated 22 million homeowners are now underwater with their mortgages. Fewer than 100,000 underwater homeowners have been able to refinance as of August 31. Obama expects that at least 800,000 more people will qualify for a refinance under these new mortgage rules.
Banks still have the right to refuse the refinance even if all requirements under the new mortgage rules are met. So, if your mortgage is NOT backed by Freddie or Fannie, you're out of luck. And even if it IS backed by one of these government lenders, you might still be out of luck. Is this really going to help?
Obama will be in Denver on Wednesday to further discuss the new mortgage rules along with an expected announcement about a change in the student loan program.