New Refinancing Lifelines: How HARP Successor Programs Can Save Underwater New York Homeowners from Foreclosure in 2024
When the Home Affordable Refinance Program (HARP) ended in December 2018, millions of homeowners thought their chance for mortgage relief had vanished. However, new programs are available to help homeowners in similar situations, offering critical alternatives for underwater New York homeowners who still need refinancing assistance in 2024.
Understanding the Current Landscape
The Home Affordable Refinance Program (HARP) was a federal program of the United States, set up by the Federal Housing Finance Agency in March 2009, to help underwater and near-underwater homeowners refinance their mortgages. In total, the HARP program helped refinance an estimated 3.5 million homes before it eventually came to an end in 2017.
For New York homeowners who missed the HARP opportunity or whose loans didn’t qualify, other programs have been created to help homeowners refinance with little or no equity. These include the Freddie Mac Enhanced Relief Refinance, the Fannie Mae HIRO program, and the Streamline Refinance for FHA, VA, and USDA loans.
Current HARP Successor Programs
Freddie Mac Enhanced Relief Refinance (FMERR)
FMERR allows you to refinance into a lower rate if your loan originated on or after October 1, 2017. It’s designed to help those who missed the HARP window or whose loan didn’t qualify for HARP. Key requirements include:
- Freddie Mac must own your loan. Your loan must be seasoned for at least 15 months. You must have little or no equity in your home (LTV greater than 97%)
- No maximum LTV ratio — If the home loan being refinanced is a fixed-rate mortgage, there’s no maximum LTV for the new loan
- You must have made NO late payments in the previous six months and no more than one in the last twelve months. Fannie Mae also mandates a minimum LTV ratio of 97.01% for owner-occupied single-family homes
Fannie Mae High LTV Refinance Option (HIRO)
If Fannie Mae backs your mortgage, HIRO might be the program for you. It was created as an alternative to HARP and allows homeowners with high LTV ratios to refinance even with little equity. This option could be perfect if you missed HARP but still want to lower your monthly payment.
HIRO eligibility requirements include:
- Fannie Mae must own your loan. It must have been originated on or after October 1, 2017. You need to have made at least 12 months of on-time mortgage payments
- Because HIRO helped homeowners with little to no equity, there were no maximum LTV ratios. Instead, there are minimum LTV ratios
Current Program Status and Alternatives
It’s important to note that Two HARP replacement programs — Fannie Mae’s HIRO and Freddie Mac’s FMERR — were put on hold in August 2021 due to a low number of applicants. With home equity increasing nationwide, many owners are eligible to refinance without needing a special program like HIRO or FMERR.
However, many homeowners are finding they can still refinance to a lower payment thanks to rising equity and low interest rates. For those with government-backed loans, If you have a government-backed loan — an FHA, VA or USDA loan — you won’t be able to take advantage of the HIRO or FMERR programs. Still, there’s another great refinance option available, to enable homeowners to reduce their mortgage interest rate — even if their home’s market value is low compared to their mortgage balance. If your mortgage is backed by the Federal Housing Administration, the Department of Veterans Affairs or the United States Department of Agriculture, you have refinancing options, even if your mortgage is underwater. FHA, VA and USDA loan programs all offer Streamline Refinance options, which are quick and affordable refinance loans with reduced eligibility requirements.
Benefits of HARP Successor Programs
These programs offer significant advantages for qualifying homeowners:
- The biggest benefit is that qualifying borrowers can refinance into a lower interest rate and monthly payment, helping them afford housing costs and avoid foreclosure
- Private mortgage insurance (PMI) not required — If you have PMI on your existing loan, it must be transferred to the new loan. But if you don’t currently have PMI, you won’t pay it on the new mortgage · Streamlined application process — Simplified documentation requirements mean you may not have to prove income, assets, or liability information
- You don’t have to use your current lender — Both electronic and manual underwriting options are available to the same or a new servicer (meaning you can shop for the best rate on your high-LTV mortgage)
When Professional Help Becomes Essential
Navigating these complex refinancing programs can be challenging, especially when homeowners are already facing financial stress. This is where experienced legal counsel becomes invaluable. Our office is centrally located for easy access throughout Long Island. Six (6) veteran attorneys with many years of combined legal experience. With over 30 legal professionals on our team, we have the resources to handle your important legal matter.
For New York homeowners struggling with underwater mortgages, professional Foreclosure Prevention services can provide crucial guidance on available refinancing options and help protect your home from foreclosure proceedings.
The Broader Context of Mortgage Relief in 2024
If you’ve been wondering about the Home Affordable Refinance Program extended, or whether you still have options to refinance your home, 2024 presents plenty of opportunities. While HARP is no longer available, other programs like FMERR, HIRO, and Streamline Refinances can help lower your payments, reduce your interest rate, and keep your home affordable. Refinancing isn’t a one-size-fits-all solution, so evaluate your personal situation and determine whether now is the right time to move forward. Whether underwater, looking to drop your PMI, or hoping to lock in a lower interest rate, refinancing in 2024 could save you thousands of dollars in the long run.
Our approach is personalized to your specific situation and goals. Contact us today to schedule your free consultation and explore your options for bankruptcy, foreclosure defense, and debt relief. Our law firm concentrates in bankruptcy solutions and is experienced in representing individuals and businesses in Suffolk County, Nassau County and the greater LI and NYC areas in all chapters of the bankruptcy code and in all matters that may arise in bankruptcy cases.
Taking Action in 2024
While the original HARP program may be gone, underwater New York homeowners still have viable pathways to mortgage relief. Start by evaluating your financial situation, then explore programs like FMERR, HIRO, or FHA Streamline Refinance. It’s also good to shop around for lenders to find the best rate and terms.
The key is to act quickly and seek professional guidance. Getting initial information and advice is free, and experienced attorneys can help you navigate the complex landscape of mortgage relief programs, ensuring you don’t miss out on opportunities that could save your home and your financial future.
Don’t let an underwater mortgage lead to foreclosure when alternatives exist. Contact qualified legal professionals who understand both the refinancing landscape and foreclosure defense strategies to explore all your options in 2024.