At least one bank doing business in the Treasure Valley says too few eligible people are taking advantage of a federal program to help them refinance mortgages.
Not enough people know about low-interest loans through the federal government’s Home Affordable Refinance Program, the Bank of the Cascades says. The program refinances mortgages for borrowers who owe more on their homes than they're worth.
“Market rates are at an all-time low right now, and we are eager to help customers reduce their monthly payments by taking advantage of this government stimulus program,” said Lance VanSooy, vice president and mortgage regional manager for Bank of the Cascades.
HARP is limited to mortgages that are owned or backed by Fannie Mae and Freddie Mac. Homeowners must be current in their mortgage payments, and with only one late payment in the past year.
The loan-to-value ratio cap is 125 percent, meaning you cannot borrow more than 125 percent of what the home is worth. Bankers think that limit should be raised. The banking industry is seeking to expand the limit to allow more homeowners to qualify, the bank said in a news release. New requirements are expected in March. Borrowers also could see changes to the requirement for appraisals, which can be costly.
The program is set to expire Dec. 31, 2013.
For more information, contact the bank at (877) 385-9935, Fannie Mae at (800) 7FANNIE or www.FannieMae.com, or Freddie Mac at (800) FREDDIE or www.FreddieMac.com.
HELP FOR OTHER MORTGAGES
If your mortgage is not owned or guaranteed by Fannie Mae, Freddie Mac, the Federal Housing Administration, the Veterans Administration or the U.S. Department of Agriculture, you may be able to take advantage of another program called FHA Short Refinance.
FHA Short Refinance was designed to help homeowners refinance into more affordable, more stable FHA-insured mortgages. If your lender agrees to participate in this refinancing, it will be required to reduce the amount you owe on your first mortgage to no more than 97.75 percent of your home’s value.
Borrowers must be current on their mortgage, qualify for the new loan under standard FHA requirements and have total debt not exceeding 55 percent of their monthly gross income. They also must not have been convicted within the past 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction.
Contact your mortgage servicer to see if it participates in the FHA Short Refinance and if you qualify. Participation by mortgage servicers is voluntary. The FHA Short Refinance program expires Dec. 31, 2012.
For more information, contact the FHA National Servicing Center at (877) 622-8525 or http://1.usa.gov/jTEk7Y.
