With this as the case, HARP was enacted by the US federal government to provide a refinancing program allowing some upside-down homeowners an opportunity to refinance their mortgage. Unfortunately, if you have a VA loan and want to take advantage of the streamline low VA rates or a FHA loan and their low rates you will not be able to use the HARP program for your refinance. The HARP is only for those homeowners with a Fannie Mae or Freddie Mac insured/backed mortgage. Below you will find some additional requirements of HARP to help you determine whether you qualify.

• You must have not missed or been more than 30 days late with your mortgage payment over the past 12 months.
• You must be current with your mortgage payment.
• Using the HARP program must put you in a better more stable financial situation like lowering your monthly payment or converting a more risky adjustable rate mortgage or an interest only mortgage into a fixed rate mortgage.
• You must have no equity in your home and not have your mortgage balance be more than 125% of the value of your home.
• You must have sufficient income and proof of the financial means to repay your new mortgage payment

With these simple requirements in mind, you may or may not think that you can qualify for HARP. The best advice is the call a mortgage lender to find out. You can call your current mortgage company first and then call a few other companies to see what kind of answers you get. You ought to call several companies anyway to give you a range of offers to compare. At the very least, you’ll know where you stand with a refinance if you are upsidedown.

A few highlights from the video:

NOD’s were down 7.5% from September – BUT – they are pretty much within a range.

NOD’s up 103% year over year.

Bank owned inventories are up 5.6%.

Properties that are being bought by 3rd parties are up 16% since September – and is up 381% year over year.

With better information available to investors such as Foreclosure Radar, it is becoming less risky to buy on the courthouse steps.

Two highlights from clip:

“We need a two year moratorium at least for homes that are under $200,000…”

“You bailed out Wall Street, how about helping out Main Street…”

The 125% Obama Refinance is now available because we have at least one lender will allow you to refinance under the Obama refinance plan up to 125% of your home’s value.

Keep in mind, even though the expansion to 125% was announced back in early July, lenders have been somewhat slow to adopt the plan as they had to make sure that everything was set up for it. This is not all that uncommon – many times the government will announce a program and then it won’t actually be available for months.

With so many people here in California owing more than their home is worth, the Obama 125% refinance option is a viable option for many, many people.

According to CNN:

More than one in five borrowers are now underwater, with homes in parts of California and Florida losing more than 50% of their value, according to Zillow.com, a real estate Web site. Some 20 million people own homes worth less than their mortgages.

Will the Obama 125% refinance option help everyone? No. But if you are current on your mortgage payments and have good credit, interest rates are at their lows again and now that lenders will actually do the Obama 125% refinance…

There has never been a better time to take advantage of the program.

There are two “magic” numbers that you need to be aware of: 105% and 125%.

If you currently do not owe more than 105% of your property value, then you can refinance right now under the Making Home Affordable plan – also known as the “Obama Refinance”.

If you currently owe more than 105% but less than 125% on your property, then soon you will be able to refinance under the expanded “Obama Refinance” plan. The plan has been announced and lenders are figuring out how to implement it now.  Expect sometime this fall for lenders to roll the plan out.

If you currently owe more than 125% of what your property is worth, there is no “Obama Refinance” program that will help you — so these are your options:

1. Continue making your payments
2. Short sell your house
3. Attempt to get a loan modification that will most likely still leave you with 50% (or more) negative equity
4. Foreclosure

What Should You Do If You Have 50% Negative Equity And A Reduction In Your Income?

The short answer: If you can’t continue to do #1 (make your payments) and you want to live in the home, try #3 (loan modification) with your lender but be ready to do #2 (short sell your house) to hopefully avoid #4 (foreclosure).

Today, it was announced by HUD Secretary Shaun Donovan that people who owed more than 105% of what their home was worth could now refinance up to 125% of the home’s value. This is great news to many homeowners in California because now they can refinance up to 125% of the homes value where the prior limit under the Obama Refinance Plan was 105%. This expansion to the Making Home Affordable plan will help many people right here in California and is another sign that the Obama administration is doing whatever they can to contain the foreclosure problem.

Right here in California, this change is expected to help thousands of people who currently owe more than 105% of their home’s value to refinance to lower rates. Before rates go up again, it is expected that many people here in California will rush to get their refinance applications in.

According to CNN:

More than one in five borrowers are now underwater, with homes in parts of California and Florida losing more than 50% of their value, according to Zillow.com, a real estate Web site. Some 20 million people own homes worth less than their mortgages.

News reports in Bloomberg said:

A drop in values has left about 20.4 million of the U.S.’s 93 million houses, condos and co-ops with mortgages higher than the properties are worth as of March 31, Seattle-based real estate data service Zillow.com said in a report May 6.

For California Homeowners: What This Means

While it is difficult to tell exactly how many people in California will benefit from this change, there are surely many people right here in California who will now be able to refinance – and hopefully avoid foreclosure. For the most up to date information on the new Obama refinance expansion announcement, be sure to contact a California mortgage expert today!