As the Obama administration’s revamped Home Affordable Refinance Program (HARP) goes into effect this month, the latest version will offer some key changes that should make it more attractive to the lenders that are not required to offer these loans to their borrowers. Some of the differences include the removal of the 125 percent loan-to-value (LTV) ceiling, reduced risk-based fees or loan-level pricing adjustments, representation and warranty relief for the lenders committing loans to the program, and an extension through the end of 2013 for the program.
However, as syndicated real estate and personal finance columnist Ilyce Glink noted in a column published on December 2, 2011, HARP “does not have a great track record up to this point” with fewer than 100,000 underwater borrowers able to refinance their properties. Saying that it is “hard to imagine these numbers will grow substantially,” Glink added that “the need is huge.”
Glink wrote about a woman she spoke to on her radio show who has a 6.5 percent interest rate on her loan and originally put down 20 percent on the property, but now has a house that is worth only about $110,000 instead of the $175,000 she paid eight years ago. Now far underwater, the caller’s husband lost his job and the couple is struggling with their monthly debt obligations because his new job pays so much less.
Glink said the biggest problem is that neither Fannie Mae nor Freddie Mac owns the couple’s mortgage, a conventional 30-year loan. Furthermore, the loan servicer refuses to disclose who owns the loan, only confirming that the company is not participating in “HARP 2.0.”
“This is another family that might well end up in foreclosure, and not for lack of trying,” Glink said.
Does this sound familiar? Have you tried to take advantage of HARP for foreclosure help only to find dead ends? Did you know filing for Chapter 7 or Chapter 13 bankruptcy could not only stop foreclosure and help keep you in your home, but could also reduce, reorganize or eliminate your debt and end creditor harassment?
Benjamin Brand Services – Chicago bankruptcy attorney