Chase Mortgage Unit to Expand Help for Those ‘Underwater’

Chase, the nation’s largest bank, said it is joining the Obama Administration’s expanded program for homeowners who are “underwater” to refinance their homes at current, historically-low interest rates.

Chase announced that it will participate in the enhanced Home Affordable Refinance Program (HARP) that will allow more homeowners who have made their mortgage payments on time in the last year to refinance, despite not having enough equity to qualify for traditional refinancing.

Chase made public their commitment soon after the Federal Housing Finance Agency, the regulator for Fannie Mae and Freddie Mac, announced the expansion of two-year-old HARP, a program that is widely considered a failure because it has not reached enough homeowners with negative equity, including those facing foreclosure.

The primary HARP fix removes the long-standing 125 percent loan-to-value (LTV) ceiling for fixed-rate mortgages. However, homeowners have to be current on their mortgage payments to qualify, leaving many who face foreclosure unable to take advantage of the LTV adjustment.

Chase has other stipulations. The existing mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009. The new HARP program will be phased in starting with loan applications dated Dec. 1, 2011, or afterward.

“We are pleased to work with FHFA to expand the HARP program because it should help thousands of Chase customers reduce their monthly mortgage payments,” said Frank Bisignano, CEO of Mortgage Banking at Chase. “We estimate it could lower a family’s mortgage payments by an average of $2,500 a year, providing them more financial flexibility and improving the quality of their lives.”

HARP normally reduces the borrowers’ monthly payment by providing a new loan at a lower interest rate. It can also replace an adjustable-rate or interest-only loan with a standard, fixed-interest rate loan.

Here are HARP qualifications for Chase Customers:

  • The existing mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
  • Customers must be current on their loan. They may have made one late payment on the existing loan in the past 12 months but none in the most recent 6 months.
  • The customer may not be in bankruptcy or foreclosure.
  • The refinanced loan must provide a reduction in payment or more stable product — for example, moving from an adjustable rate to a fixed rate.
  • The existing mortgage on the home must be no more than 125 percent of the home’s current value. The 125 percent LTV cap will be removed sometime in the first quarter of 2012. The home can be the customer’s primary residence, a second home or an investment property.
  • The building must have no more than four units and can be a single-family home, a condo or a co-op.
  • The original loan cannot be a Pay-Option Adjustable-Rate Mortgage or a subprime loan.

For additional information or to determine if you are eligible to participate in HARP, Chase said customers should call 800-228-4922.

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