Scott Storace - Branch Manager, 100 Pacifica Drive Ste. 140, Irvine CA 92618 NMLS #226339 949.973.0141

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The Skinny On HARP 2.0

HARP Help For Homeowners

HARP Help For Homeowners

Orange County, CA – Many people haven’t been able to lower their home payments due in large part to negative equity. Often banks won’t lend to these people, simply because the value of their homes is less than the figure they still owe. Anyone who bought during the housing boom with a low down payment could easily be in this position. This makes it difficult to refinance to a lower payment. Yes many are still able to repay their mortgage every month but who most want relief from higher interest rates.

This is where HARP 2.0 comes in. The Obama administration rolled out HARP, standing for the Home Affordable Refinance Program, back in 2009. This program didn’t quite work as planned, so a few tweaks were administered, and HARP 2.0 was born. Far more people have jumped at the opportunity to use the HARP 2.0 program, which shows how much more effective it is for people. Going back to May, around 20% of all refinancing that took place was through the HARP 2.0 program.

In a nutshell, HARP 2.0 is a refinancing program specifically designed to help homeowners who are in a negative equity situation. It’s for the people who don’t actually qualify for normal refinancing loans because their homes are technically under water. At launch, HARP 2.0 was the only program available out there which could help people in this position to refinance their conforming loan.

The changes between HARP 2.0 and HARP 1.0 are essentially two fold. HARP 2.0 allows its borrowers to refinance even if they have mortgage insurance, which obviously opens up the market considerably. The second change is much more significant and has been the impetus for the growth of HARP 2.0. With HARP 1.0 the maximum loan to value could not exceed 105% or 125% depending on the lender. HARP 2.0 does not put a ceiling on the loan to value. Your home value could be half of what you owe and, as long as it meets other qualifications, then it would be eligible under HARP 2.0.

To qualify for the HARP 2.0 program, Freddie Mac or Fannie Mae must guarantee your note. And your note must have been purchased by them on or before May 31, 2009. Keep in mind that servicing and ownership can be 2 different things. You might make your payment to Wells Fargo or Bank of America but it could still be owned by Fannie or Freddie. In order to verify you should look up your loan on their websites. Check here: and

You will need a current loan to value ratio which is greater than 80%. You cannot already have refinanced through HARP unless it was a Fannie Mae between March and May 2009. But there is no limit on the number of financed properties. That’s great for investors with multiple loans. Investment properties are eligible as well!

But HARP 2.0 does not cover all conventional loans. There is talk of HARP 3.0 coming this year. But we’ll cover that at another time.

Get in touch today if you think you could benefit from a great program like this!


Scott Storace

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