Monday, March 12, 2012

Eligible underwater borrowers may have an opportunity to refinance loans at lower interest rates




Am I Eligible for Help Under the National Mortgage Settlement?

You are current on your loan, but underwater.
Potential Benefits
Eligible underwater borrowers may have an opportunity to refinance loans at lower interest rates.


Preliminary Checklist for Eligibility

You own and occupy your property, and your property has no more than four separate units.
Your mortgage is serviced and owned by one of these banks: Bank of America, JPMorgan Chase, Citibank, Wells Fargo, and Ally Financial (formerly GMAC).  Note that Fannie Mae and Freddie Mac-owned loans may be eligible for refinance under a separate program called HARP.

To see if your loan is owned by Fannie Mae or Freddie Mac, go here. 


Your mortgage is underwater—i.e., you owe more on the loan than the current value of the house.
 You have not made any late mortgage payments within the last 12 months. 
You have not been through a bankruptcy or foreclosure in the last 24 months.
 Your current interest rate is at least 5.25% 
The refinance would reduce your interest rate by ¼ of a percentage point or your monthly payment by at least $100. 
Your mortgage is not a manufactured home loan, and it is not insured by the Federal Housing Administration (FHA) or the Veterans’ Administration (VA). 
There are no restrictions on when your mortgage was made – could be any date.




You may be eligible for HARP if you meet all of the following criteria:
  • The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
  • The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
  • The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
  • The current loan-to-value (LTV) ratio must be greater than 80%.
  • The borrower must be current on the mortgage at the time of the refinance, with a good payment history in the past 12 months.
*Eligibility criteria are for guidance only. Contact your mortgage servicer to see if you are eligible for HARP.


Ask your mortgage servicer (the company to which you make your mortgage payments) if they participate in HARP. Not all mortgage servicers do. ContactFannie Mae or Freddie Mac for help in determining if you may be eligible for HARP. 
Program ends December 31, 2013.


  • Determine whether your mortgage is owned or guaranteed by Fannie Mae or Freddie Mac by visiting their respective Loan Lookup Tools.
  • Contact your current mortgage servicer or another that is approved by Fannie Mae or Freddie Mac to inquire about HARP.
  • Compare rates and costs with additional mortgage companies to ensure best refinance terms.



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