Fannie Mae and Freddie Mac have removed barriers to refinancing underwater home loans according to an October 24, 2011 article published on houselogic.com. Alton & Westall Agency is happy to provide a link to this useful information.

The federal government today expanded its Home Affordable Refinance Program so home owners who owe more than their homes are worth can refinance into lower interest rate loans — as long as their original mortgage was guaranteed or owned by Fannie Mae or Freddie Mac.

Since its start in March of 2009, HARP has helped 838,000 Fannie Mae and Freddie Mac borrowers refinance home loans worth 80% to 125% of the value of their homes. Now, there will be no upper limit on how much the refinanced mortgage can exceed your home’s value if you opt for a fixed-rate loan, a change the government hopes will result in twice as many HAMP refinances.

To refinance using HARP, you must:

• Have a mortgage owned or guaranteed by Freddie Mac or Fannie Mae.

• The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.

• You can’t have used the HARP program already (there is an exception for Fannie Mae loans refinanced under HARP from March through May, 2009).

• The amount you owe on your mortgage must be 80% or more than your home’s value (you can’t use this program if you have more than 20% equity in your home).

• You can’t have any late payments in the past six months and you can’t have more than one late payment in the past 12 months.