HARP 3 Mortgage Refinance News
by "Left Out" in California
HARP 3.0 Mortgage Refinance News: Hi Kate - I have an underwater mortgage but am not eligible for HARP or HAMP. I don't want to walk away from my home, but it seems I don't qualify for any mortgage modifications since I refinanced into my current loan after the May 2009 cutoff.
"Left Out" continues...
I refinanced late in 2009 to take advantage of better interest rates and intending to continue occupying my home. At the time, prices had fallen, but were still above what I owed on the mortgage and "stable" according to the appraisal.
Unfortunately I had to move out of state for work and so I decided to rent out the property while I waited for prices to recover. However, since then prices have plummeted. The property is worth 60% of what I owe on the mortgage and I am losing money even with a tenant. Any advice?
Kate Answers: HARP 3.0 Mortgage Refinance - HARP 2.0 News
Dear "Left Out",
With an estimated 11,000,000 underwater mortgages yet only 1 million qualified to refinance, it isn't hard to see that homeowner assistance is a necessity. You are a perfect example!
So why can't the remaining 10 million borrowers refinance under the HARP 2.0 plan?
1. Many borrowers' mortgages were sold to Fannie or Freddie after the May 31, 2009 eligibility date
2. Others have non-government sponsored entity (non-GSE) mortgages, which means they are not backed by Fannie Mae or Freddie Mac
3. Mortgage lender overlays and inconsistencies
. Participation (and enthusiasm) in the program is less than stellar, even though the new HARP 2.0 plan
is a vast improvement over the bad behavior of the original HARP 1 program
Yet, the fact remains, lenders continue to add their own restrictions. But HARP 3.0 could change this! Let's see how!
HARP 3.0 Mortgage Refinance Background
When President Obama first proposed his streamline refinance plan in January 2012, it was not yet known as HARP 3. (In fact HARP 2.0 was not fully released until March 2012!)
You can read the initial proposal that I announced at Ask Kate about the Obama Refinance Plan
and again in my update a couple of months later at Is HARP 3.0 Fact or Fiction
How HARP 3.0 Can Help Homeowners
Although HARP 3.0 for upside down mortgages is still stuck in the Senate as of today, May 15, 2012, it seems to be taking more shape. Here is the recent scuttlebutt on the streamline refinance proposal that is looking friendlier than HARP 2.0.
- Eliminate requirement for mortgages to be backed by Fannie Mae or Freddie Mac.
- No appraisals.
- Drop the minimum credit score requirement to 580.
- Banks finance the program instead of taxpayers and homeowners.
A related bill just introduced by 2 senators, Responsible Homeowner Refinancing Act of 2012
, also proposes fines for second lien holders and private mortgage insurance companies who unreasonably block homeowners from taking advantage of the plan.
Read more about President Obama's plan to streamline underwater mortgage refinances in the following links...
Alternative Mortgage Refinance and Modification Programs
While we wait for HARP 3.0 to (hopefully) become a full-fledged refinance plan, where can homeowners turn for underwater mortgage help? Follow my links to learn more about:
1. FHA Streamline Refinance
for homeowners with FHA financing.
2. HARP 2.0
for homeowners with Fannie Mae and Freddie Mac mortgages.
3. FHA Short Refinance
for homeowners who do not have FHA home loans.
4. HAMP Phase 1 and 2
, mortgage loan modifications by Making Home Affordable.
Don't fit one of these categories? Bookmark this page
and save it in your favorites to watch for HARP 3.0 underwater mortgage updates.
Lastly, difficult options to discuss are included in Home Affordable Foreclosure Alternatives
(HAFA), such as short sale, deed in lieu, and deed for lease. However I hope you can hang in a while longer until we know if the proposed HARP 3.0 plan is indeed fact or fiction.
Good luck and best wishes,
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