Monday, October 24, 2011

The Obama Administration Tweaks Its HARP

The Obama Administration is touting a new program to deal with the ongoing real estate mess, but in reality, it's a repackaging and tweaking of an older set of programs that didn't get the job done.

I've written about the Home Affordable Refinance Program (HARP) program in the past, and we actually refinanced under this program through our lender. JP Morgan Chase sent us the information via FedEx noting that this was a limited time refinancing option and that we could refinance with no strings attached and for limited costs.

The program itself is pretty straight forward if you meet the qualifications. You have to be current on your mortgage and have shown an ability to repay your loans. There's little in the way of paperwork - and is primarily done through your existing lender as long as your mortgage is owned by Freddie Mac or Fannie Mae.

The program was meant to help 5 million homeowners, but to date it's helped about 890,000 homeowners. The Administration hopes that tweaking the loan-to-value limits will enable more homeowners to take advantage of refinancing into lower rates or more stable mortgage products that would allow the homeowner to spend more on other things.

While I continue spending money on doing all kinds of projects around the house, the refinancing has meant that I can now pay off the loan faster (lower piti but paying the same as previously). It gave me a cushion to work with in case I need to curtail spending elsewhere or need emergency funds.

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