The Federal Housing Finance Agency has extended the government's Home Affordable Refinance Program by 12 months.

HARP's new end date is June 30, 2011.

Originally known as Making Home Affordable, HARP aims to help homeowners refinance their mortgage who may otherwise be ineligible because of falling home values.

There are 4 basic HARP criteria every borrower must meet:

1. The existing home loan must be guaranteed by Fannie Mae or Freddie Mac.
2. Your home must be a 1- to 4-unit property
3. You must have a perfect mortgage payment history going back 12 months. No 30-day lates allowed.
4. Your first mortgage balance must be 125% or less of your home's market value

If you're not sure whether Fannie Mae or Freddie Mac back your mortgage, you can look it up. Fannie's website is http://www.fanniemae.com/loanlookup; Freddie's is http://freddiemac.com/mymortgage.  If you don't locate your loan on either website, your mortgage is backed by a third-party and is not HARP-eligible.

For homeowners that meet HARP's criteria, there are some underwriting details of which to be aware.

First, if your original mortgage does not require mortgage insurance, your HARP mortgage will not require it, either -- regardless of your new loan-to-value.

Second, all HARP refinances require income verification. It doesn't matter if your original mortgage was a stated income or no income verification loan. You should expect to produce 1040s and W-2s for your HARP refinance and asset statements, too.

And, lastly, second (and third) mortgages may not be "rolled in" to a new first mortgage loan balance. Junior lien holders must agree to remain in a junior lien position, regardless of combined loan-to-value.

There is a thorough HARP FAQ section on the government's website, but it's for general questions only. For specific Home Affordable Refinance Program information, first make sure you're program-eligible, then pick up the phone to call your loan officer. 

HARP is complex enough that you'll want to talk with a human before taking a proper next step.

The Home Affordable Refinance Program (HARP) has been extended until June 30, 2011, according to the Federal Housing Finance Agency (FHFA).

“FHFA has reviewed the current market situation and the state of mortgage insurance availability and has determined that the market conditions that necessitated the actions taken last year have not materially changed,” said FHFA Acting Director Ed DeMarco, in a statement on its website.

“Accordingly, to support and promote market stability, and to encourage lenders and other mortgage market participants to fully adopt the HARP program, including the implementation of the October 2009 expansion of loan-to-value ratios (LTVs) to 125 percent, FHFA is authorizing the extension of HARP until June 30, 2011.”

The program is one portion of the government’s Making Home Affordable Program, which also includes the Home Affordable Modification Program (HAMP).

It began in April 2009 and was set to expire on June 10 of this year; HAMP is expected to run until December 31, 2012.

Apparently things are worse than anticipated, what with more than 11.3 million, or 24 percent, of all residential properties with mortgages in the United States underwater as of year-end.

Of the more than four million refinanced mortgages purchased or guaranteed by Fannie Mae and Freddie Mac in 2009, 190,180 were HARP refinances with loan-to-value ratios between 80 percent and 125 percent.

If you’re looking to refinance with negative equity, this is your ticket.

Hat tip to my friend Matthew Frey of Bankers Funding Co.     Matt lives in Coto and can be reached at  Matthew.A.Frey@bankersfundingcompany.com

When the White House first introduced the Making Home Affordable program in February, it was positioned as a mortgage program with two goals:

1. To help financially-needy homeowners get mortgage relief
2. To help homeowners who've lose equity qualify for today's low rates

Wednesday, in a much-anticipated announcement, the U.S. Treasury introduced new details about Making Home Affordable. 

It also created an "Am I Eligible For Making Home Affordable" form on its website.

In the press release, the Treasury detailed the President's original blueprint.  Namely, it provided explicit loan modification instructions that will assist up to 4 million delinquent homeowners and their respective mortgage servicers.  

The modification guidelines are a thorough 17 pages long and leave little question about the loan modification process, and how it must be carried out.

But for as much ink committed to helping delinquent homeowners, the Treasury gave surprisingly little guidance to the estimated 5 million homeowners for whom deteriorating home equity has rendered refinancing impossible. 

For these Americans, the Treasury instead offers a basic Q&A and directs homeowners to call Fannie Mae and/or Freddie Mac to confirm their eligibility. The "refinance plan", in summary, says that a homeowner who has paid his mortgage as agreed and whose home value is "about the same or less" as the amount owed on his first mortgage may be eligible.

That's about as much as the Treasury could say.

If after browsing the website, you still have questions about the Making Home Affordable program, call your mortgage lender with specific questions.