Southwest Florida continues to deal with a large number of short sales and foreclosures. Florida’s economy is still depressed because of the massive number of mortgages in default. Florida had one of every nine U.S. foreclosure filings in the third quarter of 2011.
Some homeowners who have not made it to the default stage yet, may be eligible the Home Affordable Refinance Program. This program has been extended and the final updates should come out by December 2011. The program is designed to help people who are current on their mortgage but have been unable to refinance because the value of their home has gone down. This program is a new loan and does require the normal loan application, underwriting process, as well as refinancing fees. It is an official program of the Departments of the Treasury and Housing and Urban Development. The deadline has been extended to December 31, 2013.
How do you know if you are eligible? Well, the best way is to contact your mortgage servicer to determine your eligibility. But here are some general guidelines. The only loans that qualify are ones that are owned or guaranteed by Fannie Mae or Freddie Mac. You have to be current on your mortgage payments and you cannot have been more than 30 days late in making any payments in the last year. The loan to value (LTV) ratio must be above 80 percent. Refinancing has to improve the long-term affordability of your mortgage and you have to have the ability to make the new payments. Also, your loan must have been taken on or before May 31, 2009.
If you want to see if your home is secured by Fannie Mae, go to the following web site. Type in your street address, city, state and zip code and then click results. This is provided as a service and does not guarantee accuracy of the results, but it is a starting point. http://www.fanniemae.com/loanlookup/
The HARP program is not offered by all mortgage service providers. So, if your mortgage servicer is not participating then you can contact another lender that does participate to see if you are eligible for refinancing. This program may not always be the best approach for everyone. You should also contact other mortgage companies to see where you can get the best refinance terms. You want to be sure to compare rates and costs involved.
Bank of America is one lender that participates in the program. According to their web site, once you make the initial call, they will order an appraisal and pull a credit report to verify your financial information. With the new changes, an appraisal can be eliminated if there is a reliable AVM (automated valuation model) estimate provided by Fannie Mae or Freddie Mac. It will take approximately 75 days to evaluate your application. Once a decision has been made that you are eligible, a closing will then be scheduled.
Although this program is designed to help some people, it still does not provide help for those who are seriously delinquent on their loans or in default. If you do not qualify for the HARP, you may still be eligible for other home loan assistance solutions. Contact your mortgage provider today to see if they can assist you.
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