We have had questions on what HARP is (since the enhancements were just announced), so here you go:
On Monday, October 24th, 2011, The Federal Housing Finance Agency (FHFA) announced their enhancements to the Home Affordable Refinance Program (HARP). The HARP program came about during the credit crisis to help borrowers refinance who may be “under water” on their homes.
What's Really New?
First, it's important to realize that the president's proposal is not a new program, but a revision to the current Home Affordable Refinance Program (HARP). However there are some big changes that you can let people know if they ask you.
Refinance…No Matter How Underwater
Now homeowners can refinance no matter how underwater they are! Before homeowners could only refinance if they were 25% or less underwater, and even then many banks only let people who were 5% or less underwater refinance.
No Appraisal Necessary?
With the program's revision, it's possible that an appraisal won't have to be performed. That's great news because it can help people save time and money. But this is only the case if Fannie Mae or Freddie Mac can electronically estimate the value through their valuation models.
But Keep in Mind…
These updates to HARP apply only to people whose mortgage is currently secured by Fannie Mae or Freddie Mac...and whose loan was securitized by Fannie Mae or Freddie Mac prior to May 31, 2009. So the chances are that people who have refinanced since May 2009 will not qualify to refinance under the HARP revision.
What's Next?
As of now, the revisions to HARP have been proposed by President Obama and the Federal Housing Finance Agency (FHFA), which regulates Fannie Mae and Freddie Mac. This directive has been given to Fannie Mae and Freddie Mac, and they now have until November 15, 2011 to give guidance and details regarding how these changes will be run.
Check out these websites to see if a loan is owned by Fannie or Freddie http://www.fanniemae.com/loanlookup/ or http://www.freddiemac.com/corporate/.
Link to the FHFA press release:
http://www.fhfa.gov/webfiles/22721/HARP_release_102411_Final.pdf .
Monday, October 31, 2011
Tuesday, October 18, 2011
Q&A: Short Sale Sometimes Comes with Cash Incentive
Posted By susanne On October 16, 2011 @ 1:02 pm In Today’s Home Spun Wisdom
Question: I heard that some banks give homeowners money in a short sale to help them move out of the property. Is this true?
Answer: It sounds too good to be true, but it’s legit. The Sun Sentinel wrote about this in June. Many lenders will offer homeowners a few thousand dollars to leave the home in good shape following a foreclosure, but some lucky borrowers get up to $20,000 for completing short sales.
Some lenders offer financial assistance, either through internal initiatives or the government’s Home Affordable Foreclosure Alternative program. Chase and Wells Fargo were two lenders mentioned in the Sun Sentinel story, but they were intentionally vague about who qualifies for the money and why. My experience tells me that eligibility for these programs is rare, but it never hurts to try.
In some cases, you must contact your lender and ask for the money before you have a buyer in place. This is quite different from how a normal short sale works in which it’s a waste of time to contact your bank before you have a bona fide contract to sell the property. Typical incentives given by the bank are relocation assistance from $3,000 to $20,000 and a waiver of the deficiency between what your home is worth and what you owe your lender.
These programs are limited in scope, often limited by the location of the property and by who owns the loan. For example, properties in Florida are generally eligible, but loans insured by government entities—such as the Department of Housing and Urban Development, the Federal Housing Administration or the Department of Veterans Affairs—often are ineligible. If your loan is not eligible, it may very well still be approved in a “traditional” short sale.
Check Scams: Be aware of two check scams that have popped up recently.
One such scam involves a potential tenant who gives the landlord a cashier’s check or some other official check, often from a Canadian bank, as a deposit for a lease, with plans to work out the details later. There is some small dispute and the landlord and tenant can’t come to terms on the lease, and the tenant asks for the money back. The landlord tells the scammer that the cashier’s check was deposited, and the tenant agrees to take a personal check from the landlord. Often the scammer will even take less than the whole amount deposited “for the landlord’s trouble.” It’s only a few days later, when the cashier’s check bounces, that the landlord finds out the check was counterfeit, and the landlord is out the money. Be sure to call the issuing bank to verify a check before you deposit it.
Another common scam happens when the victim gives a personal check to the scammer for some service or product. A few minutes or hours later, the scammer comes back to the victim and says he had problems cashing the check. The scammer then asks the victim to take back the check and pay cash instead.
Again, the scammer may even offer a discount for the “trouble.” Several days later, the victim finds out that the scammer deposited the check with one of the smartphone camera apps allowing remote deposit and the victim is out both the check and the cash. Of course, the account is now closed and the scammer is long gone. The moral of the story: Once a check is out of your sight for even a second, do not take it back.
©2011 the Sun Sentinel (Fort Lauderdale, Fla.)
Friday, October 7, 2011
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