The other day, I mentioned the Home Affordable Modification Program (HAMP), a law that might let you force your lender to reduce your monthly mortgage payment. The companion legislation to that law is "HARP," or the Home Affordable Refinance Program.
HARP is a more limited law than HAMP; it allows homeowners to refinance if:
1. They haven't yet missed a payment, and
2. Their loan is owned or guaranteed by Fannie Mae or Freddie Mac.
Those are two pretty stringent criteria, but if you DO meet both, then you can refinance into a lower rate or fixed rate -- and the program is available to you even if you owe more than your home is worth. You can owe as much as 125% of your home's value and still refinance under HARP -- that means that on a $200,000 home, you can owe $250,000 and take advantage of HARP (if you qualify.) No lenders that I know of would refinance a loan that's greater than what the house is worth, so this is a program to take advantage of if you can.
If you're not sure about whether or not your loan qualifies, click here for a link to the program website and look up your loan.
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