Home Affordability Refinance Program Comes to the Rescue Sooner than Planned

At the beginning of July, Freddie Mac and Fannie Mae backed mortgage holders received some good news. In an effort to help homeowners that have negative equity in their homes (when the value of the home is less than the amount owed on the mortgage), the Home Affordability Refinance Program (HARP) was introduced. The program allows homeowners with Freddie and Fannie mortgages to refinance and receive up to 125% of the current home value for better loan terms and conditions. Better loan terms and conditions may mean lower monthly mortgage payments, a shorter pay-off term and a reduced principal balance.

Originally, the program was scheduled to roll out at the beginning of September, but has been moved up to become available to borrowers August 1, 2009 instead. Fannie Mae announced that moving the program availability date up would help loan originators to obtain secondary marketing pricing (the pricing investors will buy loans from the lenders at) sooner and allow them to set its origination prices sooner as well. One month may make the difference between Fannie and Freddie mortgage borrowers fighting off foreclosure or succumbing to it.

For homeowners with a Fannie Mae or Freddie Mac loan interested in applying for the HARP initiative, contact the servicer of your loan for the details on eligibility and the application process.