As the European debt crisis slogs along, mortgage interest rate in the US continue to test new lows. Unfortunately the number of borrowers who are able take advantage of the record low rates seems to be shrinking. While borrowers who have equity, solid credit, and enough income can still refinance to the record low rates through authorized lenders on our list, it is becoming more difficult for borrowers who are underwater on their mortgages to refinance. Fewer and fewer lenders are participating in the main refinance programs targeted toward underwater borrowers, the FHA streamline program and the HARP program. Part of the problem is lenders are leery about adding new upside-down mortgages to their books. The launches of the new FHA streamline program and the HARP program have sent many thousands of underwater borrowers in search of refinances from these programs and as a result of the popularity of these programs many banks simply have lost their appetite for funding such loans. If the problem persists the federal government might have to come up with greater incentives for lenders to participate in these programs because the programs will not do any good if none of the authorized lenders are willing to participate.
The good news is that some authorized lenders are still participating in both programs and it is still possible to get an FHA streamline or a HARP loan… for now. But with the retreating we are seeing among most authorized banks recently there is not telling how long both programs will be available. The HARP 2 program is already available among so few lenders that in many cases where the home is significantly underwater borrowers are looking at waits of three or more months to close their HARP 2.0 loan. With any luck the FHA and Fannie/Freddie will step up to make these programs more appealing and less risky for lenders soon.
In the meantime, contact us in the sidebar today to learn more about which programs are the best fit for your family. All of the government-backed refinance programs are still available for now so getting going now while rates are testing new lows is probably a very good idea.