In Need of Refinancing? Have You Heard of HARP? This program might help!

President Barack Obama announced on Monday that the government’s Home Affordable Refinance Program will be changed to allow homeowners with little or no equity to refinance no matter how much their home value has dropped below what they still owe. The program's acronym is HARP

1. What does HARP stand for? Home Affordable Refinance Program.

2. To qualify do I need 20 percent equity, like I currently need when refinancing? Borrowers do NOT need to have 20% equity in their home.

3. Does it matter how much negative equity my home has? Eligibility is not affected by how far the home value has fallen.

4. Refinancing is expensive, there are so many fees. Does HARP help with fees? Making refinancing cheaper, some fees such as closing, title insurance and lien processing will be eliminated or reduced. This also applies to some refinances that become shorter term loans than they originally were, once refinanced.

5. Do I have to pay for another appraisal? Not all refinances will require an appraisal.

6. Are all loans eligible? Eligibility is only for loans backed by Freddie Mac or Fannie Mae. The loan must have been acquired by either organization prior to June 2009. To find out if your loan was sold to Freddie Mac go to https://ww3.freddiemac.com/corporate/ or to see if it was acquired by Fannie Mae go to http://fanniemae.com/loanlookup/ .

7. What if I am late or not current with my mortgage? Home owners must be current on their mortgage and one late payment in six months or more than one in the past year allows the bank to determine the owner ineligible.

8. How long do I have to decide to try to refinance? The program is extended through 2013, by 18 months,

9. Does the bank “HAVE TO” refinance my loan if I am eligible? No this program is entirely voluntary on the part of the banks. The bank may refuse to refinance even if the home owner is eligible.

10. When will information be available about the program? Fannie and Freddie will issue the full details of the plan lenders on Nov. 15, 2011. Some lenders may be ready to participate in the program by December.

For more information, contact your lender to see if they will participate in the program. If so, you should consider your options regarding this program, to see if it works for you. You may save significant amounts of money over the years.

Short Sale Buyers Face Difficulty Closing Deals Quickly

RISMEDIA, February 19, 2010—(MCT)—Rachel Nacion-Ograyensek and her husband are getting nervous. The house that the two apartment dwellers want to buy—the one with the double oven, pool and tiled patio—may slip away from them.

It’s on the market as a short sale, so the owner can’t act until the mortgage holder approves the discount price. But the Altamonte Springs, Fla. couple insists on buying their first home in time to take advantage of the federal government’s home buyer tax credit, which now expires April 30, 2010.

“The house is our dream house—it’s perfect for us,” Nacion-Ograyensek said. “We are trying to get in on the tax credit, but it’s done in April, and it’s already February. We’ve gotten to the point where we’re passively looking for other houses, but none are quite right.”

Under pressure from the real estate industry, Congress extended and expanded the tax credit last fall. It was to have ended November 30, 2009 and benefit only buyers who had not purchased a home in the past three years. Like the original, the latest version is worth as much as $8,000, but it gives both first-time buyers and qualified existing homeowners until April 30 to secure a contract on a home, and until June 30 to close the deal.

Though real estate agents and home builders hope the measure boosts sales, as the previous version was credited with doing, some fear that buyer’s intent on getting a short sale bargain will not make the new deadlines.

In the Orlando area, 67% of Realtors’ existing-home sales in December 2009 were distressed sales—and about half of those were short sales, known for taking at least three months to complete. Even buyers who nail down a contract with the seller by the April 30 deadline can’t be sure the purchase will close within the required two months. “That’s where you get into that riverboat-gambling mentality,” said Jim Ruddy, the longtime real estate agent representing Nacion-Ograyensek and her husband. “Is it worth gambling that $8,000?” At this point in the tax credit countdown, buyers interested in purchasing a short sale must decide whether they are really committed to that property—enough that they would still want to purchase it if they miss the June 30 tax credit deadline, Ruddy said.

Nacion-Ograyensek said she and her husband recently revisited the short sale house in Altamonte Springs and decided it was worth the gamble. The kitchen is ideal for cooking, and the backyard is large enough if they have children or adopt a dog. They have decided to stick with their plan; still, each day that passes makes them more anxious.

In hopes of capturing tax credit-motivated buyers who aren’t focused on distressed properties, Florida’s real estate agents have scheduled an unprecedented statewide open house of properties listed for sale. The event, organized by the Florida Association of Realtors, is set for April 10-11—just two weeks before the tax credit deadline.

Kathleen McIver-Gallagher, chairman of the Orlando Regional Realtor Association, said buyers intent on getting the tax credit should be concerned if they are trying to purchase a short sale through lenders known for slow responses to short sale offers.

As the April tax credit deadline nears, buyers will probably become more interested in homes other than distressed sales, McIver-Gallagher said. “There are plenty of regular homes out there,” she added.

Compounding the delays are new reporting rules that lenders must now follow. Nate Morris, vice president of Thomas Mortgage and Financial Services, said the new requirements involve good faith estimates and HUD closing documents. “It certainly could further complicate things,” said Morris, a board member of the Mortgage Bankers Association of Florida. “I don’t see this working out till the middle of the year. Everyone in the mortgage business talks about it on a daily basis.”

By Mary Shanklin

(c) 2010, The Orlando Sentinel (Fla.).

Distributed by McClatchy-Tribune Information Services.