Ask Kate HARP 3 Refinance Update

by BB in IL, by Tracy in ID, by Gina in CO, by JC in CA, and by Kathy in CO

Ask Kate for a HARP 3 refinance update: Hi Kate. We have unsuccessfully tried to refinance our mortgage to take advantage of the low interest rates. In May of 2009, we closed with Bank of America. But they didn't sell it to Fannie until August 1st. So we are locked out of the HARP program due to the June 1, 2009 origination deadline. HAMP will not work either because of their deadline.


continued... Locked Out of HARP 2 Due to Delayed Fannie Mae Delay

By BB in Illinois

Our home was valued at $380,000 in 2009 and the November 2012 appraisal came back at $240,000. (Ouch!) We owe $325,000.

Do we stop paying our mortgage? Need help please. We are in desperate need of advice. Are we just fat out of luck to drop the 3 percentage points? Credit is good, never missed a payment, income with all other bills included is just not quite making it. Need help or we WILL be in trouble soon. Thanks.

***zz-portrait-left.shtml*** Ask Kate answers: Locked Out of HARP 2 Due to Delayed Fannie Mae Delay

Hi BB,

Fannie Mae is pretty closed lipped when it comes to explaining how it picked the HARP loan refinance cutoff date. It was unofficially announced that after May 31, 2009, homeowners had enough knowledge of the real estate market's instability and should have known their risks.

How insulting is that to homeowners!

For those not familiar with these 3 deadlines...
  1. To be eligible for HARP, Fannie Mae or Freddie Mac must have purchased a loan from the lender on or before May 31, 2009. As you found out, homeowners can't control how long Fannie and Freddie take to finalize loan purchases after transactions are closed.

  2. The January 1, 2009 cutoff for HAMP loan modification eligibility is based on the actual closing date.

  3. HARP and HAMP programs are scheduled to end December 31, 2015, unless Congress extends the date.
I have a couple of suggestions for you. First and foremost, write your elected representatives on both federal and state levels to insist on a HARP 3 loan program. If enough struggling homeowners demand answers, politicians will begin to feel the pressure and hopefully take action.

Secondly, ask Bank of America about in-house modifications since your closing date is past HAMP's cutoff. Remind them their competitor Wells Fargo offers an in-house program!

Thirdly, before your situation becomes desperate, contact Bank of America about approving a real estate short sale transaction. I'd try this before choosing strategic default, aka walking away from your house.

But I hope you can hold on long enough for the release of the HARP 3 program. Be the first to know by following my blog where I announce breaking mortgage news.

Best wishes,


HARP Tier 3 Refinancing

By Tracy in Idaho

Hi Kate, I'm wondering if you have heard much about the Harp 3 program that is rumored to come out possibly by year end. Specifically I'm looking for refinancing a second mortgage. I've heard rumors that it might include 2nd mortgages, but haven't heard in what fashion.

Will the HARP 2 loan allow refinancing for your primary and secondary loans combined, or are they kept separate? Any idea?

***zz-portrait-left.shtml*** Ask Kate answers: HARP Tier 3 Refinancing

Hi Tracy,

How I wish that HARP 3 was on our elected politicians' holiday to-do list. Sadly, as of December 1, 2012, HARP 3 refinancing remains in the proposal state.

In addition, I have not read about 2nd mortgages to be included. However, until the program is announced, assuming it is still coming, we won't know.

What we do know is that only 1st mortgages are included in the HARP 2 refinance process. So if a homeowner has a 2nd mortgage, the lender holding it must agree to sign an approved subordination agreement or the homeowner will need to pay it off with cash at closing.

As I said before, write your elected politicians. They must hear from struggling homeowners to truly understand the difficulties of pushing mortgage transactions through the banks.

Best wishes,


HARP 3 Mortgage Loan

By Gina in Colorado

Kate, I have a loan with Wells Fargo and this is not backed by Fannie or Freddie so I cannot take advantage of Harp 1 or 2. I hear about Harp 3, but no one knows when that is coming out.

So based on the estimated value of Zillow $124K, I am working on paying off my 2nd of 10K and my 1st is 139K. But as it is an interest-only mortgage, I need to refinance or my payment will triple in 2015. I cannot take advantage of any other programs because I am not behind and I do not want to ruin my 810 credit score.

***zz-portrait-left.shtml*** Ask Kate answers: HARP 3 Mortgage Loan

Hi Gina,

I'm going to tell you the same thing as BB and Tracy. Write Washington DC. Contact your politicians in Colorado. Request an update on HARP 3. Give them details. Paint a picture of your financial situation, your high credit score that is likely to suffer when your payment triples in 2 years.

You should also know that you do not need to be behind on your payment to take advantage of the HAMP program. You can call Wells Fargo to discuss a loan modification.

In addition, I am wondering if you have read my book, The Mortgage Freedom Project? It will walk you thorough the process of becoming debt free, including paying off your mortgage faster than you might think possible, by beating the bank at their own game!

Best wishes,


Mortgage Underwater with a Credit Union

By JC in Whittier, CA

Kate, I currently have my mortgage with my Credit Union and I am underwater. I owe 535,000.00 on a house that is valued at 250,000.00. I currently make weekly payments. I have asked several times to see what can be done to either lower my 6% interest rate or reduce the principal.

The only answer I get is that nothing can be done because doing either would cause this small credit union to close their doors.

***zz-portrait-left.shtml*** Ask Kate answers: Mortgage Underwater with a Credit Union

Hi JC,

Well, the first rule of customer service is that the borrower should not have to hear (or care) about the bank's troubles! So for starters, the credit union's attempt to garner your sympathy does not endear them to me.

I'm going to assume that your credit union does not participate in the HAMP modification program. But I'd ask anyway.

Until HARP 3 proposals become a viable program to refinance mortgages that are not necessarily backed by Fannie Mae and Freddie Mac, I hope you will roll up your sleeves and put on your best negotiator hat.

Try to get past the loan originator, who seldom has authority to act outside the box. But before you try to negotiate a better deal with the credit union, read what Donald Trump has to say about negotiating with the bank to save your home. (I wrote this article in 2007 when I began addressing the unprecedented onset of foreclosures across the nation.)

You might remind the credit union that a partially paid mortgage balance or a lowered interest rate is better on their books than a foreclosed loan. Go for it. I'm rooting for you.

And in spite of repeating myself, I encourage you to write your representatives in the Senate and the House, asking if HARP 3 is fact or fiction.

Best wishes,


Refinancing Jumbo Loan with HARP 3

By Kathy in Colorado

Hi Kate, Needless to say, very embarrassed about our Jumbo loan. We refinanced with HARP 1.0 in July of 2009 at 5%. I'm wondering if and when HARP 3.0 will happen as I would love a lower rate. Thanks so much for any information.

***zz-portrait-left.shtml*** Ask Kate answers: Refinancing Jumbo Loan with HARP 3

Hi Kathy,

As you can see here, HARP 3 needs to be re-routed from the political arena (and even there, interest seems to have cooled down considerably in Washington DC) into a viable loan program to help underwater homeowners refinance for affordable house payments.

Best wishes,


> > HARP 3 Refinance Update

Comments for Ask Kate HARP 3 Refinance Update.

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Losing Hope Over Modifying Underwater Mortgage
by: Anonymous

Hi Kate, I find support in reading other people's struggles that are similar with mine. But, I am losing hope that people stuck in our situations will be helped anytime soon because we seem to be too conscientious.

I have taken all of these initiatives to no avail:
I have written all politicians in CT
I contacted my mortgage broker credit union
My credit union referred me to the Servicer
The Servicer referred me to the lender
The lender referred me back to the Servicer

Finally they all say sorry. There is no hardship because you never missed payments.

I contacted HAMP they said there is no justification of hardship and that I should forgo my cell phone and cable TV. In addition, I am paying $520/month student loan.

Hi Kate here...

I hope you'll call back your lender (and loan servicer if necessary) to read them the following quote from Making Home Affordable website:
"Question: Do I need to be behind on my mortgage payments to be eligible for a modification under HAMP?"

"Answer: No. Responsible homeowners who are struggling to remain current on their mortgage payments are eligible if they reasonably believe they are very likely to default on their mortgage soon (often referred to by loan servicers as "imminent default"). This might be because a homeowner has had (or will have) a significant increase in the mortgage payment (due to a payment adjustment or rate adjustment upwards); unemployment or some other significant reduction in income; or some other financial hardship that will make the mortgage unaffordable."
But before you call, make a written presentation of your hardship and run it past a friend. Ask if they can easily understand your predicament. This is to confirm that you are adequately communicating your hardship to your lender.

If your bank still insists that you must cancel cable and cell to qualify for HAMP, ask them, if upon doing so, will they approve your loan modification so you can get a more affordable house payment!

Then write your politicians once more on the Connecticut level and those who represent you in Washington D.C. Convey your story, give them the details of your hardship as well as the correspondence with your lender.

I understand an underwater home and unaffordable mortgage payments are disheartening. But if enough of us put pressure on this lump of coal given by the recession to homeowners, eventually we are bound to see a diamond of hope emerge.

I hope you'll let me know of your progress.

Best wishes, Kate

HARP 3 Mortgage Refinancing
by: S.D. Homeowner from San Diego, CA

Kate, I refinanced my mortgage in July 2010. My house value is less than what I owe (I'm underwater). Do you think HARP 3 (if it happens) can help with my refinancing?

Hi S.D. Homeowner, Kate here...

No one knows yet if there will be a closing date cut-off to restrict which mortgages can apply for HARP 3. So I suppose that is one concern since you bought the home not that long ago. Hopefully, that restriction will be gone. As far as we know, HARP 3 will target underwater mortgages.

More than that we are just guessing, because all we've heard so far are proposals. Hopefully, a concrete program will follow shortly.

Thanks for asking, Kate

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