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HARP revisions may help some Florida homeowners, but not all

Two years ago, President Obama instituted the Home Affordable Refinance Program, also known as HARP. It had been hoped that four to five million homeowners would benefit from the available mortgage modifications. It was expected that the program would provide for much needed debt relief to millions of homeowners in the form of lower monthly mortgage payments for those homeowners struggling financially.

Under the program, it was hoped that homeowners with mortgages owned by Fannie Mae or Freddie Mac could refinance at lower rates and thus save money on their monthly mortgage payments.

Unfortunately, HARP has only benefitted about 800,000 homeowners. This less than desired outcome was a result of numerous fees, high closing costs, troubles with appraisals for homes underwater and liability with respect to former loans.

Last week, Mr. Obama unveiled a new and improved version of HARP, which aims to address these problems and hopefully benefit the people who need help the most. Lower closing costs and the elimination of refinancing fees are among the major changes to HARP.

Most importantly, the limit on how much a home can be underwater has also been eliminated, meaning that homeowners will no longer be disqualified from the benefits of HARP because of how much they owe and how much their home is worth.

In addition, previously many homeowners were disqualified from HARP if they had ever been delinquent on a mortgage payment. However, under the revised program, so long as a homeowner is current with their mortgage payments, they will be able to qualify regardless of their payment history.

These changes will certainly help more Florida homeowners qualify for HARP. However, many more will still be left struggling. Florida homeowners who are either delinquent or whose mortgage is not owned by Fannie Mae or Freddie Mac will not qualify for HARP.

Struggling Florida homeowners should not lose hope. It may still be possible to negotiate a mortgage modification even without the benefits of HARP. If you are struggling to make your mortgage payments but want to avoid foreclosure, you should seek help to see if you might be able to negotiate a mortgage modification on your Florida home.

Source: The Pioneer Press, "Obama gives homeowners new help with refinancing," Kevin G. Hall, Oct. 25, 2011

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