Skip to content

Hope for refinance for underwater borrowers

by Dorota Trzeciecka on April 9th, 2012

When I called my mortgage company to request refinancing of my mortgage a couple of  years ago, the mortgage representative told me that my house would have to appraise at $645,000 for me to qualify for a refinance.  My house might have appraised at that amount during the 2006 housing boom, but clearly would not in today’s or 2009 real estate market.  In short, I could not refinance and take advantage of record low interest rates, because my home lacked equity.  But now, there may be hope for these homeowners who previously lacked the equity to refinance.  The program is not new; it has been in existence since 2009 under the name of HARP, or Home Affordable Refinance Program.  Only, it did not catch on — the lenders shunned away from it as too risky and too restrictive.  So, last fall, the Obama administration revamped the program to encourage banks to work with underwater homeowners.   The program eliminates, for example, the requirement  that the loan could be no more than 125% value of the house.  Fannie Mae and Freddie Mac, on their part,made the HARP loan application processing easier.

HARP is limited to loans owned or guaranteed by Fannie Mae and Freddie Mac, the big government-run mortgage companies. That includes about 60 percent of all mortgages.  So, the chances are good that your loan falls into that category.  To determine if you’re eligible, you  can check your own mortgages at or

There are other eligibility requirements for HARP, for example:

  • The existing mortgage must have been accepted by Fannie or Freddie before June 1, 2009.
  • The mortgage cannot have been refinanced under HARP previously. Fannie Mae loans refinanced from March to May 2009 are excepted and eligible.
  • The borrower must be current on the mortgage, with no late payment for six months and no more than one late payment in the past year.

To learn more about HARP, visit the government website at  

To learn more about bankruptcy terms beginning with the letter H, follow these links:

Harassment By Creditors

Harassment by Creditors

Hardship Discharge



Bankruptcy Hijacking

Home is Where the Heart Is

Home: Can the Trustee Take It?

Homeowner’s Association Dues


Honest but Unfortunate Dept


Honesty and Fraud Avoidance





Household Median Income

Household Size

How Much Is Your Home Worth?

Save My House from Foreclosure

Holding Property for Another