Refinance while Underwater? HARP Expanded to Reach More Borrowers

A ray of hope has just been offered to some homeowners with properties that are seriously upside down, according to the California Association of Realtors.

In order to help a broader range of distressed homeowners and offer relief to the housing market, the Federal Housing Finance Agency announced on Oct. 24 that the mortgage relief program HARP — the Home Affordable Refinance Program — has just been expanded.

Per FHFA, Fannie Mae and Freddie Mac have helped approximately 9 million families refinance into a lower cost or more sustainable mortgage product, approximately 10 percent of those via HARP. HARP is unique in that it is the only refinance program that enables borrowers who owe more than their home is worth to take advantage of lower interest rates and other refinancing benefits.

One of the biggest hurdles for borrowers who are current on their home loans and are considering refinance is the fact that the equity on their house is too low to qualify for a refinance. Until now, Fannie Me and Freddie Mac would only allow fixed-rate mortgages if the borrower’s property stays under 125 percent loan-to-value.  This requirement prevented many upside-down borrowers from refinancing to take advantage of the current low interest rates that they desperately need.  The enhanced HARP guideline lifted that restriction.

Other HARP program enhancements effectively reduced certain fees associated with the refinance as well as eliminated the need for a new property appraisal if the FHFA has a reliable automated valuation model estimate.  Both allowed cash strapped borrowers the ability to refinance without the steep fees a refinance might require.  The HARP program, schedule to expire at the end of 2011 has now been extended until the end of 2013.  New federal guidelines for the HARP changes should be released to mortgage lenders and servicers by Nov. 15.

According to the California Association of Realtors, the basic eligibility requirements for an enhanced HARP loan are as follows:

  • Existing mortgage loan must be owned or guaranteed by Fannie Mae or Freddie Mac.  Borrowers can check whether they have a Fannie Mae or Freddie Mac loan by going to
  • Existing mortgage loan must have been sold to Fannie Mae or Freddie Mac before June 1, 2009.
  • Existing mortgage loan cannot have been refinanced under HARP previously (except for Fannie Mae loans refinanced between March and May 2009).
  • Current loan-to-value (LTV) ratio must be more than 80%.
  • Existing mortgage loan must be current, with no late payments in the past six months, and no more than one late payment in the past 12 months.

Words of Caution:  Remember my previous blog about SCAMs – Too Good To be True, Then Beware? There are a lot of scammers out there to take advantage of distressed homeowners at their most vulunable stage.  Before engaging services that promise to modify your loans or save your home from being foreclosed on, make sure you check out the FTC Mortgage Assistance Relief Services Rule that outlaws advanced fees and false claims and requires clear disclosures from the servicers.

More Information About HARP:

More information about HARP is available from FHFA.

Other Resources for Distressed Homeowners:

CA State Assembly extended Anti-Deficiency Proection for Original Loan Refinances


Unfortunately, this very logical bill, which passed both the assembly and senate was vetoed by the Governor.  But CAR (California Association of Realtor) will renew its fight next year for a similar bill – Sylvia

A relief for homeowners with deficiency on thier refinanced original mortgage loans and who are now facing foreclosure is one the way –

According to news just released by California Association of Realtors on August 19, 2010 that CA State Assembly passes SB 1178 protecting homeowners:

The bill essentially allows homeowners who defaulted on the mortgage that are part of refinance of the original purchase debt to limit their liability to the property itself; same as the treatment of the original ‘purchase money’ loan.

The bill moves to Government Schwarzenegetter for signature and if signed, will become effective June 2011.

This Only Makes Sense!

Following is the Press Release:

For release:

Thursday, Aug. 19, 2010

California State Assembly passes SB 1178 protecting homeowners

Measure protecting consumers from overreaching lenders now goes to governor’s desk for signature

LOS ANGELES (Aug. 19) – The California State Assembly today approved SB 1178 (D-Corbett) by a 49 to 14 vote, extending anti-deficiency protection for consumers who have refinanced their original mortgage loans and now are facing foreclosure. The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) is the sponsor of the consumer-protection legislation.

Under existing law, if a homeowner defaults on a mortgage used to purchase a home-commonly referred to as a “purchase money mortgage”-the homeowner’s liability on the mortgage is limited to the property itself. However, homeowners who refinanced the original purchase debt, even if only to obtain a lower interest rate, were not extended the same protections. SB 1178 corrects this unfairness and extends the same protections to consumers who refinance their home loans.

“Cash-out” debt for home improvement or consumer expenses is not protected by SB 1178. Similarly, additional new debt secured by the home, such as a home improvement loan, is not protected-only original acquisition debt.

“Today’s vote was a victory for homeowners in California, but the fight is not yet finished,” said C.A.R. President Steve Goddard. “We are urging Gov. Schwarzenegger to swiftly sign into law this crucial piece of legislation. Passage of SB 1178 will ensure lenders underwrite refinance loans at least as carefully as purchase money mortgages and will provide much-needed consumer protection.”

SB 1178 now moves to Gov. Schwarzenegger for his signature. If signed, SB 1178 will become effective June 2011.

Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® ( is one of the largest state trade organizations in the United States with nearly 160,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles. ###

Fannie Mae Suspends Foreclosure Sales Further, Major Lenders Follow Suit and How to Find Best Priced Homes in Marin County Now!

Fannie Mae announced a suspension of all foreclosure sales and evictions of occupied properties through March 6 in anticipation of the Administration’s national foreclosure prevention and loan modification program.

See Fannie Mae News Release and How to Find the Best Deals Now At the End of Article!

While Dow Jones Newswires reported that JPMorgan Chase, Citygroup, Bank of America and Wells Fargo have committed to temporary moratoriums (suspends) on foreclosures as the government works on a financial stability plan aimed at keeping people in their homes. 

The following are briefly what was announced by each lender –

JP Morgan Chase – New Owner-Occupied residential loans that are owned and serviced by JPMorgan Chase.  As with Fannie Mae, the moratoriums will remain in effect through March 6th.

Citigroup – All Citi-owned first mortgage loans that are principal residence and on loans for which understandings with investors have been reached.  Moratorium end date – March 12th.

Bank of America (also Countrywide) – Delay foreclosures sales on owner occupied properties whose mortgage loans are owned and serviced by BofA or Countrywide  – Through March 6th.

WellsFargo (also Wachovia) – For Loans it holds.  The moratorium is expected to remain in place until the government’s foreclosure prevention plan is announced.  The majority of WellsFargos mortgage loans are serviced by it and owned by other investors.  WellsFargo is working with their investors .. to determine how to support the moratorium request.

Most of the lenders plan to evaluate and extend their specific moratorium dates depending the progress made by government.

See complete articles Fannie Mae News Release:

Fannie Mae Suspends Foreclosure Sales Pending Administration Announcements

From CNN of Dow Jones Newswires – Bank Agree to Foreclosure Moratoriums

Hopefully the suspension of foreclosures and the government bail out plan (I will be posting blogs about the government bail out plan that affects home ownership soon) will allow at-risk home owners to keep their homes and stabilize the housing industry and general economy!    

How To Find the Best Deals Now?How to Find The Best Deal Now

Where should the buyers look when there is no or few REO (Bank Owned) properties on the market (which is already relatively low in Marin County)? 

Look at Well Priced Homes (many sellers have dropped price considerably due to the softening market, Short Sales ( yes, short sales require hard work, lots of patience but very rewarding).

The best way is to get an agent who is diligent and Knowledgable in looking for homes, not only Foreclosures, but Short Sales, Trustee Sales, Competitively Priced Homes; one who works hard, strong in negotiation, have YOUR BEST INTEREST in mind, not anxious to get you to sign on unless it’s right for you; one that is YOUR ADVOCATE, to help you find that perfect home – 

The Americacn Dream:

Perhaps one day when the economy is stronger, we can take a collective sign of relief and cheer for the stable economy, strong housing market and solid job market where all can have a stable job, good income and own their home and Fulfill their American Dream Once Again! 



Sylvia Barry, Realtor, ePRO
Marin Realtor for Marin Luxury Real Estate 
Marin, San Francisco North Bay
Frank Howard Allen Realtors 

MARIN, SONOMA, S.F. BAY AREA REAL ESTATE – Beveldere, Corte Madera, Greenbrae, Kentfield, Larkspur, Marinwood, Mill Valley, Novato, San Anselmo, San Rafael, Sausalito, Tiburon; Cotati, Penngrove, Petaluma, Rohnert Park, Santa Rosa.   Starter Home to Luxury Property.  REO (Bank Owned), Short Sale, View Homes, Architectural Distinctive Homes. Investment, 1031 Exchange.

Novato Market Review as of April 30, 2008

 Novato Market Review as of April 30, 2008

Changes since March 19, 2008.  Available units changed from 376 to 436 (16% increase), in escrow changed from 82 to90 (10% increase), so we have a loss of 5% in percent in escrow. 

The biggest gain in In-Escrow is in the your bread and butter single family home price ranged from $600K to $800K and not surprisingly, the $1M to $1.25M range where the rich but not super rich are looking for homes.  The fixers and very small homes (1,000 sf or slightly more) see a drop in houses under contract. 

Will be an intersting summer.  I will keep an eye on all homes and keep you informed!   



Total Units/ In Escrow


% Active


% Pending

% +/- since 3/19

All SFD’s and CID’s
























$0 -$500K SFD
















$600,001 – $700K








$700,001 – $800K








$800,001 – $999,999








$1M – $1.25M








$1.25M – $1.5M
















  • Buyer’s Market  < 25%
  • Neutral                25% – 40%
  • Seller’s Market   > 40%