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The Home Affordable Refinance Program (HARP) has been Extended for Another Year

The Home Affordable Refinance Program (HARP) has been extended for another year according to information released on Friday from the Federal Housing Finance Agency.

The program was due to expire on June 30 but will now continue until that date in June 30, 2012.

HARP is designed to assist homeowners who owe more money on their current mortgage than the market value of their home.

The use of HARP more than tripled in 2010. During the year a total of 6.8 million mortgages were refinanced nationwide and HARP, with 621,803 loan closings, represented nearly 10 percent of the total. In 2009 190,180 homeowners used the program to refinance.

To qualify for HARP you must currently have a mortgage owned or guaranteed by the Freddie or Fannie Mae, have a one year history of on-time payments on your loan, and owe more on your loan than your home is worth. The loan-to-value, however, cannot exceed 125%.

When HARP was announced in March 2009, the intent was to provide up to 5 million replacement loans to homeowners on more favorable terms.

That proved unattainable, as did the goal of the sister plan known as Home Affordable Modification Program.HAMP, as it's called,initially aimed at modifying the terms of existing loans to help up to 4 million homeowners avert foreclosure.

While far off the ambitious early marks, Fannie Mae and Freddie Mac have provided 621,803 refinance loans under HARP as of Dec. 31, 2010, compared to 579,650 permanent modifications provided by HAMP.

The HARP program initially was designed to handle loans amounting to 80% to 105% of the value of the home. But as property values plunged, putting millions of homeowners further underwater on their mortgages, the loan-to-value ratio was increased to 125%.

In addition to extending the program for a year, Freddie Mac will exempt HARP loans from certain recently announced increased fees, according to Fannie Mae and Freddie Mac's overseer, the Federal Housing Finance Agency.

The FHFA also said that Fannie Mae is changing its previous eligibility cutoff of Jan. 1, 2009, to May 31, 2009, meaning another five months of loans may be considered for a HARP refinance.

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