Underwater Mortgages Offered a Lifeline

Special Update:

This morning, FHFA announced their enhancements to the HARP refinancing program. Operational details of the plan are to be released on November 15. Only loans that were purchased or guaranteed by Fannie Mae or Freddie Mac on or before May 31, 2009 and have a current LTV over 80% are eligible. In addition, the loan must be current, no late payments in the last six months and no more than one late in the last 12 months. There are no restrictions on who may refinance these loans. Program guidelines include:

- No limit on LTV, if new loan is a fixed rate loan (current LTV must be above 80%)

- Loans previously refinanced under HARP not allowed

- Certain agency fees will be waived if new loan is a shorter term loan

- Appraisals not required where Agency AVM is available

- Certain originator Reps and Warrants will be waived

Borrowers can determine if their loan is owned or guaranteed by Fannie or Freddie at http://www.fanniemae.com/loanlookup/ or http://www.freddiemac.com/corporate/