For underwater borrowers, or those homeowners that owe more than their home is worth, there was some potentially good news lately. What is being called HARP 2.0, or the Home Affordable Refinance Program, is a set of changes that is being made to the original HARP program in an attempt to help more underwater borrowers refinance into a lower rate mortgage. Although more details are still forth coming, guidelines were recently released by Fannie Mae and Freddie Mac.

As with the original HARP program, the new program is for borrowers whose mortgage is held by Fannie Mae or Freddie Mac and are current with their mortgage payments. Borrowers cannot have made any delinquent payments in the past 6 months and can have made no more than one late payment in the past 12 months.

The program could help to lower monthly payments but would not reduce principle unless the principal is paid down by the borrower at the time of refinancing. The old program included a maximum loan to value (LTV) ratio of 125%. The new program will not have a limit on LTV ratios for fixed rate mortgages with terms of up to 30 years.

Participation by lenders is voluntary, but one of the key changes to the program that will hopefully inspire more lenders to participate is the waiver of certain representations and warranties that lenders originating the loans are required to commit to.
The new program is set to begin in December of 2011, although many lenders may not be ready to participate by then. The program expires December 13th, 2013. More details are still coming for the new HARP program. Interested borrowers should stay in touch with their lender to see if they will be participating and to find out if they qualify.

I have also included the most recent sales numbers for homes in the Bozeman area. As shown, 2011 sales numbers continue to outpace the past 4 years. The included data reflects sales of homes in the greater Bozeman area, including Four Corners, Gallatin Gateway, Bridger Canyon, and Bozeman city limits. The data includes home sales reported through the local Southwest Montana MLS, and does not include private party sales.

Tim Ford – REALTOR©