Start Consolidating first second mortgages

Consolidating first second mortgages

When you’re ready to find out if HARP can help you save money every month: —————————————————————————————————————————————– Robert Koller is a director in Fannie Mae’s Credit Risk Management division and is responsible for managing Fannie Mae’s Refi Plus™ Initiative, which includes the Home Affordable Refinance Program (HARP).

If you are eligible to refinance through HARP, you’ll take out a new mortgage and use those funds to pay off your existing first mortgage and usually the closing costs for the new loan.

To understand why being underwater on your two mortgages is a problem, you need to know how first and second mortgages work: Here are five options that can help you refinance your first mortgage anyway: In simple terms, subrogate means your second mortgage lender agrees to stay in the second position and let your newly refinanced mortgage be the first to get paid off if your home goes into foreclosure.

This is much more likely to happen if the same company holds your first and second mortgages than if two different companies or investors are involved, says Sam Garcia, publisher of Mortgage

It’s the only widely available refinance program that allows homeowners with little or no equity in their homes to take advantage of today’s lower interest rates.

Even if you have a second loan on your home and think you won’t be eligible to refinance because you owe as much or more than your home is worth, HARP might be an option.

HARP is only for Fannie Mae- and Freddie Mac-guaranteed loans.

The 2012 multi-billion-dollar settlement between the biggest banks and 49 state attorneys general (over robo-signing) to aid distressed borrowers included money to pay off second mortgages in some states.“It’s worth finding out if that’s the case in your state by checking the website for your state’s AG to see if your existing servicer is participating,” Garcia says. Search the AG’s website for “mortgage settlement” to find the information.

This makes it impossible to replace the old first mortgage with a new one unless the second mortgage lender provides the refinancing lender with a written statement indicating a willingness to subordinate the second mortgage to a new first mortgage.