Tag Archives: refinance

Federal Mortgage Refinancing Program Extended Through 2015

FinanceHomeBalanceiStockThe Federal Housing Finance Agency recently announced that it will extend it’s Home Affordable Refinance Program (HARP) to December 31, 2015. It was set to expire on December 31, 2013.

(If you are struggling to make your mortgage payment, visit Nolo’s Foreclosure Center.)

What Is HARP?

HARP is part of the federal government’s Making Home Affordable Program. It allows homeowners with Fannie Mae and Freddie Mac mortgages to refinance their underwater home mortgages if they meet certain criteria. Requirements include:

  • the mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac on or before May 31, 2009
  • the homeowner is current on mortgage payments, and
  • the loan-to-value ratio must be greater than 80%.

What Does a HARP Refinance Do?

If you qualify for HARP, you may be able to refinance (even if your home has lost value) and get a mortgage with a lower interest rate, a lower monthly payment, a fixed-rate, or a shorter mortgage term.

To learn more about HARP requirements and how to apply see Nolo’s article The Home Affordable Refinance Program (HARP2).

Do I Have to Reaffirm Mortgage Debt After Bankruptcy in Order to Refinance?

ASK LEON 

Bankruptcy expert Leon Bayer answers real-life questions.

Dear Leon,

I filed for bankruptcy and received a discharge a year ago. I now want to refinance my home. My current mortgage is with Wells Fargo Bank and Freddie Mac.  Wells Fargo told me that in order to refinance I have to reaffirm my mortgage or take my home out of the bankruptcy. I don’t want to pay my former bankruptcy attorney to do this for me. Can I do this myself?

Alice

Dear Alice,

I can’t remember ever having a client sign a bankruptcy reaffirmation agreement covering a mortgage debt. I would say as a general rule it is a bad idea and also unnecessary. Here’s why:

If your house and mortgages were correctly listed in the bankruptcy, and if your bankruptcy case is now officially closed, then your house is legally and officially “out of the bankruptcy,” just the way Wells Fargo wants it to be.

You can go the bankruptcy court clerk’s office and get a copy for yourself of the Order Closing Case, and hopefully Wells Fargo will be satisfied with that. You could also pay a paralegal to get the document for you.

There may also be an easier way for you: I would bet that if you call your lawyer’s secretary and ask very sweetly, they will get it without charging you. A smart lawyer is always happy to do little things like this for clients, because a smart lawyer wants your referrals and to have nice things posted on the Internet!

I hope this works out for you.

-Leon

Leon Bayer is a Los Angeles bankruptcy attorney.  He is a partner at Bayer, Wishman & Leotta, a California law firm specializing in bankruptcy.  The opinions and advice in this blog post are from Mr. Bayer alone, and should not be attributed to Nolo.  By answering a question on this blog, Mr. Bayer does not become your lawyer.

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