Texas Banking Rates

Underwater Texas Home Loans Receive Relief from New HARP Guidelines

Texas Home Loans

Borrowers of Texas home loans may have found frustrating roadblocks with the first iteration of the Home Affordable Refinance Program (HARP), also known as the HARP refinance program, that was instated by the government to help home owners like those within the Texas community refinance their home loans, despite owing more than the value of the property.

However, the new revamped version of the HARP refinance program, dubbed HARP 2.0, has expanded its field of eligibility for borrowers who are still interested in refinancing underwater mortgage loans.

HARP Refinance Program Changes

Texans who were denied traditional refinancing approvals because of their underwater mortgages were encouraged to apply for the HARP refinance program in 2009, when it was first offered. It was a dismal day, however, when borrowers realized the restrictions of the program due to issues like lender-paid mortgage insurance and lackluster loan-to-value ratios.

The latest rendition of HARP gives residents looking for refinancing underwater mortgage loan options more leeway in terms of eligibility requirements. Those with underwater Texas home loans must meet the following criteria:

  • Mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae
  • Mortgage must have been sold to Fannie Mae of Freddie Mac on or before May 31, 2009
  • Mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009
  • The current loan-to-value (LTV) ratio must be greater than 80%.
  • The borrower must be current on the mortgage at the time of the refinance, with no late payments in the past six months and no more than one late payment in the past 12 months.

Homeowners who are willing to be patient enough to undergo the process may benefit from the most recent HARP update.

Texas Home Loans Play the Waiting Game

Despite the more lenient eligibility requirements for refinancing underwater mortgage loans through HARP, some Texas homeowners may feel biting frustration creeping back.

Ultimately, borrowers of Texas home loans may have to test their patience as banks have been flooded with HARP applications. According to the New York Times, about 60 percent of all current Bank of America refinancing applications and 40 percent of Wells Fargo’s refinancing applications are vying for this refinancing program.