Update 3-16-12: From all indications, the new automated underwriting guideline changes are set to take effect around March 17 for the HARP DU Refi Plus program. As long as the individual lenders are on-board with the HARP guidelines, this should be an excellent opportunity for some people to refinance with limited hassles.
HARP is the Home Affordable Refinance Program. If you are current on your mortgage and have been unable to obtain a traditional refinance because the value of your home has declined, you may be eligible to refinance through HARP 2.0. HARP is designed to help you refinance into a new affordable, more stable mortgage. It is a new loan and will require a new loan application and new underwriting.
On November 15, the government released the details of the new HARP refinance program. Effective December 1, some lenders were accepting applications for those hoping to refinance, but they were limited to manual underwriting and only to clients that used that particular lender for their original loan. While some borrowers have been helped, the numbers have not been strong.
What is the benefit to the HARP 2.0 program? 
First, the borrower can have an unlimited loan to value, so you can be “underwater” in your mortgage. Second, homeowners will be able to refinance into lower interest rate mortgages without the need (in some cases) for private mortgage insurance, high closing costs, and in many cases, a new appraisal. The main factor is that the lenders are looking for borrowers who have a good mortgage repayment history.
Because the general concept is to help those who are trying to stay afloat with their high interest rates in a property that is worth less than the current mortgage balance, the lenders will be looking for those who are CURRENT in their payments. The thought is that if you haven’t defaulted with your high payments, chances are you won’t if your payments are hundreds of dollars less.
There are five questions on the HARP checklist that will need to be answered to see if you will qualify. I’ll discuss the first and leave the others for my next post.
Question #1: Is your mortgage currently backed by Fannie Mae or Freddie Mac?
If the answer is YES, you qualify so far. If you are not sure, you can check to see if your home mortgage is backed by either of them by going to the following:
If you find your property listed here, you have crossed the first hurdle. If not, chances are you are not eligible.
Note: This program will be on a first come first served basis for applications. I fully expect to see a lot of activity and it may overwhelm the underwriters and staff. It would not be unheard of to raise the rates to slow down the submissions a little, so be prepared and get in early with a good clean file and all the requested documents needed right away.
Click here to see: HARP 2.0 part II
Scott
Your Indiana mortgage expert specializing in FHA, VA, and USDA Rural Development loans.
[...] In our last post about HARP, I wrote about what it is, it’s benefits, and some of the qualifications. If you missed it, click here to see HARP 2.0. [...]