The Home Affordable Refinance Program (HARP), which was set to expire June 30, 2011, has been extended for another year through June 2012. The government's refinance program could offer relief to more homeowners with underwater mortgage loans.
HARP was initially proposed in 2009 to help about 5 million homeowners struggling with mortgages. By the end of 2010, the program had only helped 621,803 homeowners, according to the Los Angeles Times.
Finding mortgage relief
HARP is available to homeowners who owe more on mortgages than their homes are worth. About a quarter of all homeowners were underwater on home loans at the beginning of 2011, making them ineligible for refinancing with most mortgage lenders. The HARP program offers help to people who are underwater on a mortgage as long as it does not exceed 125 percent of the house's current market value.
To be eligible for help through the government's program you must:
- Have a mortgage owned or guaranteed by Fannie Mae or Freddie Mac
- Be current on mortgage payments and have been no more than 30 days late during the past year
- Show that refinancing would improve the long-term affordability or stability of your mortgage
- Have enough income to make the new loan payments
Get help with your mortgage
The best way to determine your eligibility for the refinance program is to contact the mortgage lender or loan servicer directly. You can also use an online tool to see if your mortgage is owned or guaranteed by Fannie Mae or Freddie Mac. There also are housing counselors approved by the Department of Housing and Urban Development (HUD) who can discuss your situation. A housing counselor can help set up a plan of action and prepare an application for the refinance program at no charge. Avoid paying fees to anyone for this service.
Mortgage rescue scams
Struggling with a mortgage can lead to desperation, but keep your head in order to avoid falling for a mortgage rescue scam. The following things may indicate that the person offering to assist you is really out to scam you:
- They ask for an upfront fee to counsel you or modify your mortgage
- They pressure you to sign papers on the spot without reviewing them
- They claim they can save your home if you sign or transfer over the deed to your house
- They tell you to make mortgage payments directly to them
If believe that you have been targeted by a mortgage rescue scam, you can file a complaint with the Federal Trade Commission. It's always a good idea to remember that if someone makes a promise too good to be true, it probably is.