In an effort to sign more eligible homeowners up for the Home Affordable Refinance Program (HARP ), the Federal Housing Finance Agency (FHFA ) is holding its third HARP outreach event on October 2 in Detroit.
The purpose of the event will be to educate eligible homeowners on the benefits of refinancing through HARP and provide community leaders with resources to reach those eligible. The government estimates that nearly 28,000 homeowners in the Detroit area could reduce their mortgage payments by as much as $1,800 a year as a result of a HARP refinance.
The panelists at the meeting will discuss the Neighborhood Stabilization Initiative (NSI ), which is a pilot program designed by FHFA to help those neighborhoods that were hit hardest by the financial crisis. NSI involves community leaders and non-profits working with those who have fallen behind on mortgage payments to avoid foreclosure by maximizing payment relief. Detroit is the first city for the pilot program, which was announced earlier this year.
"We know that one size doesn't fit all when it comes to helping homeowners and neighborhoods recover," FHFA Director Mel Watt said in a statement. "Our goal is to get the word out about HARP to borrowers who are current but underwater, and help borrowers who are either delinquent or at risk of losing their home recognize that they too have options. In Detroit, local leaders and community groups are already doing a tremendous amount of work and we applaud their proactive approach. Our event will allow us to coordinate more directly with those trusted sources as we move forward."
The event will be a town hall-style meeting featuring Watt, community leaders, and other housing experts such as FHFA Deputy Director for Housing Mission and Goals Sandra Thompson, representatives from Fannie Mae, Freddie Mac, Quicken Loans, U.S. Department of Treasury, and the National Community Stabilization Trust, a non-profit organization that FHFA has partnered with for the NSI program.
Borrowers are eligible for a HARP loan if they meet the following requirements: Their loan must be owned or guaranteed by Fannie Mae or Freddie Mac; the loan must have been originated on or before May 21, 2009; LTV ratio must be greater than 80 percent; and they borrower must be current on mortgage payments. They must not have had a late payment in the previous six months or more than one late payment in the previous 12 months. Borrowers who could benefit from HARP are referred to as "in the money" borrowers; they are "in the money" if they meet all the HARP eligibility requirements, have a remaining balance on their loan of greater than $50,000 with more than 10 years left on their term, and have an interest rate of more than 1.5 percent more than current market rates.
As of June 2014, about 3.1 million homeowners have refinanced through HARP since it was introduced by FHFA and Treasury in 2009 as part of the Making Home Affordable Program. FHFA previously held events similar to the upcoming Detroit meeting in Chicago and Atlanta.