Changes to HARP May Benefit Some Underwater Homeowners in New York

December 1, 2011
>> Bankruptcy, Mortgage

On October 24, 2011, The Federal Housing Finance Agency released a PDF file detailing the changes to the Home Affordable Refinancing Program (HARP), which is not to be confused with HAMP, the government’s mortgage modification program. These changes are all part of the President’s “We Can’t Wait” initiative to help improve the economic outlook while his jobs bill is stalled in Congress.

Previously, HARP allowed qualified homeowners whose mortgage debt amounted to less than 125 percent of their houses’ current values to refinance at the current low rates at a fixed rate. HARP also eliminated the mortgage insurance fees for homeowners who had less than 20 percent equity in their homes. Homeowners’ mortgages had to be either guaranteed by the federal government or owned by Fannie Mae or Freddie Mac. The President’s initiative makes the following changes to benefit underwater homeowners:

(1) Removing the 125 percent cap
(2) Extending HARP’s duration to December 31, 2013
(3) Eliminating fees for those who refinance into shorter-term mortgages, e.g. 20-year mortgages rather than 30-year mortgages

These changes will help some homeowners, but it does not do the following:

·       Help homeowners whose houses are in foreclosure
·       Help homeowners whose mortgages are in default
·       Reduce the principal on mortgages
·       Apply to anyone whose original mortgages began before June 1, 2009.

This should give readers an idea as to how limited these modifications to HARP are. Sadly, it will only help one million homeowners when 3.5 million are more than four months behind on their mortgage payments. This is where talking to an experienced bankruptcy attorney can help. Bankruptcy gives homeowners facing foreclosure the benefit of the automatic stay, which halts foreclosure actions and prohibits creditors from taking any action to collect on debts you owe them.

For more questions about refinancing an underwater mortgage, bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced New York bankruptcy attorney Bruce Weiner for a free initial consultation.

Rosenberg, Musso & Weiner, L.L.P
26 Court St # 2211
Brooklyn, NY 11242, USA
718-855-6840
http://nybankruptcy.net/

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