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Millions of homeowners are underwater on their mortgages, owing more than their homes are worth. This year HARP (Home Affordable Refinance Program) has been re-vamped to allow more homeowners to refinance their mortgages.

This is great news, as Corelogic estimates that 11 million homeowners are underwater and could benefit from assistance. The new changes to HARP will allow the homeowner to refinanceregardless of how much their home has dropped in value.

There are some guidelines in order to refinance under HARP. In order to be eligible:

- The mortgage must be owned by Fannie or Freddie (and originated before June 1, 2009)

- The mortgage must have been paid on time for the last 6 months, and have no more than 1 30day late in the last 12 months

- The current loan-to-value ratio must be over 80%

- Previous participants in HARP are not eligible

This is GREAT news for homeowners who havekept up with their payments! These homeowners can move forward in the program right away. Remember, this program is available throughDecember 2013. Even if a homeowner currently has some recent late payments, if they can get and stay current, they can eventually take advantage of HARP to refinance their home.

Fees have been reduced for HARP loans, and in most cases, an appraisal is not needed. Lenders can utilize Automated Valuation Models (AVM’s) to instantly determine the home’s value.

Lenders must then show that the homeowner reaps at least one of these benefits by participating in HARP:

- The new loan reduces the size of the monthly payment

- By refinancing, the loan is changed to a more stable loan product

- The new loan reduces the interest rate

- The refinance moves the loan to a shorter term

These new changes are expected to help millions of homeowners refinance to a more manageable, stable loan, and allow them to stay in their homes and avoid foreclosure.