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real estate

Underwater Mortgage Relief

The federal government is making it easier for homeowners who owe more on their house than it's worth to qualify for its refinancing program.

More homeowners who are underwater on their mortgage should be eligible now to refinance through the government's Home Affordable Refinance Program (HARP) as a result of changes to the program announced today.

Introduced in 2009, HARP aims to help people who have been unable to refinance because they owe more on their home than it's worth. However, homeowners whose mortgage exceeded 125% of their home's market value were ineligible for the program -- but that's changed. The loan-to-value cap has been lifted.

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Other program changes announced October 24 by the Federal Housing Finance Agency include the following:

-- Elimination of certain risk-based fees for borrowers who refinance into shorter-term mortgages

-- Elimination of the need for a new property appraisal when there is a reliable automated valuation model estimate by Fannie Mae or Freddie Mac

-- Extension of the program until December 31, 2013 (from June 30, 2012)

To be eligible, homeowners must have a mortgage owned by Fannie Mae or Freddie Mac (look up your loan) and must be current on their mortgage payments. For more information, see the Federal Housing Finance Agency's HARP fact sheet.

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