IMPORTANT ANNOUNCEMENT ABOUT HOMEOWNERS UNDERWATER ON LOAN.

FHFA, Fannie Mae and Freddie Mac Announce HARP Changes to Reach More Borrowers

HARP provides borrowers, who may not otherwise qualify for refinancing because of declining home values or reduced access to mortgage insurance, the ability to refinance their mortgages into a lower interest rate and/or more stable mortgage product. HARP is unique in that it is the only refinance program that enables borrowers who owe more than their home is worth to take advantage of low interest rates and other refinancing benefits.

Borrowers do not need to use third party companies that advertise themselves as "mortgage experts" or "foreclosure specialists" to apply for a HARP loan. Before calling such companies borrowers should talk first with their mortgage lender.

In general, borrowers must meet the following criteria:

• The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.

• The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.

• The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.

• The current loan-to-value (LTV) ratio must be greater than 80%.

• The borrower must be current on the mortgage at the time of the refinance, with no late payment in the past six months and no more than one late payment in the past 12 months.

Borrowers who owe more on their house than the house is worth will be able to reduce the balance owed much faster if they take advantage of today’s low interest rates by shortening the term of their mortgage.

If the borrower refinances under HARP and their new loan is a fixed rate mortgage, there is no maximum LTV. If the borrower refinances under HARP and their new loan is an adjustable rate mortgage, their LTV may not be above 105%.

Timing will vary by mortgage lender. The Enterprises will be sending operational instructions to lenders by November 15th. Some lenders may be able to accommodate mortgage applications under some of the enhancements by December 1 while it could take other lenders additional time to incorporate the expanded program into their systems. In addition, some of the enhancements such as delivery of loans with LTV greater than 125 should be operational during the first quarter of 2012.

http://www.fhfa.gov/webfiles/22721/HARP_release_102411_Final.pdf