Much has been made in the news recently about new changes to the HARP (Home Affordable Refinance Program) program that is supposedly going to help homeowners. Although the changes may be helpful to some, there are a few things you should know before you jump on board.
First, the program is a refinance of what you currently owe--not what your property is worth. In other words, if you're underwater now, you'll be underwater after the refinance. It doesn't reduce the amount you owe.
Certainly, if you have an insanely high interest rate, and refinancing through the program will lower your payment dramatically, then it may be a benefit. But if the payment is at or near the same, you're just replacing one loan with another.
The big concern is that by refinancing, you may lose valuable defenses should you ever go into foreclosure. Right now, your loan may have been bought, sold, assigned, securitized, and sold as an investment on Wall Street. That provides you a number of defenses to foreclosure, if you end up there. But if you refinance, and then default afterward, you've lost those defenses. You've now got a foreclosure that's much tougher to defend.
Before you jump on board with refinancing your loan with another loan of the same value and losing all your foreclosure defenses (enticing, isn't it), you should make sure you're eligible. Your loan needs to be owned by Fannie Mae or Freddie Mac. And--and this is the good part--you need to be current on your mortgage payments. So if you're already in foreclosure, this option isn't for you anyway.
What you want to look for are any changes in HAMP (Home Affordable Modification Program). That's the modification program for borrowers who are in default on their loans, and which guarantees to lower your mortgage payment (if you qualify, of course).
Question? Call us at (954) 987-0515 or http://www.weaverlegalgroup.com/.
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