Relief for Underwater Homeowners

Monday, March 5th, 2012

Many homeowners would like to take advantage of the historically low mortgage loan rates we’ve been seeing in recent months, but they’ve been unable to because their homes are now “underwater”—their homes are worth less than the amount they still owe. The government has instituted an enhancement to its current assistance program to allow these homeowners to refinance, no matter what the current value of the home is compared to the amount still owing. Freddie Mac and Fannie Mae have adopted changes to the Home Affordable Refinance Program (HARP), and you may be eligible to take advantage of these changes.

Do you qualify for the enhanced Home Affordable Refinance Plan (HARP)? Here are the eligibility requirements:

  •  If your mortgage is owned or guaranteed by either Freddie Mac or Fannie Mae, you may be eligible to refinance your mortgage under the enhanced and expanded provisions of HARP.
  •  You can determine whether your mortgage is owned by either Freddie Mac or Fannie Mae by checking the following websites:  or
  • Your mortgage must have been sold to Fannie or Freddie prior to June 1, 2009.
  • You must be current on your payments. You must have paid on time for the prior 6 months and for 11 of the last 12 months. Payments made late previous to the last 12 months won’t affect your eligibility as long as you meet the current requirements.
  • You must not have used HARP before—the government allows only one HARP refinance per mortgage.

Borrowers are not required to refinance with their original lender. 

If you think you may be eligible, here are some tips to prepare for a discussion with a lender.

  • Get all your mortgage paperwork in order.
  • Determine if your mortgage is eligible. Have you stayed current on your payments for the last year, and is your loan held by Fannie Mae or Freddie Mac?
  • Talk with a mortgage loan specialist to determine if you can shorten your loan term. Those who choose a shorter loan term may qualify for additional benefits.
  • Not all mortgage lenders can work with all borrowers, so be sure you establish your eligibility. For example, regarding the HARP program, Salal CU can only work with borrowers whose mortgages are owned by Fannie Mae (but we may have other options available, so don’t hesitate to ask for assistance).
  • Schedule your free, confidential, one-on-one with a Salal Senior Residential Loan Specialist by calling 800.562.5515.*

For more information on HARP, check the website of the Federal Housing Finance Agency at

*All Salal loans are subject to approval.Equal Housing Lender

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