Editor’s Note: The HARP program expired Dec. 31, 2018, but most homes have increased in value considerably since HARP rolled out. This means many homeowners may currently be eligible for a standard conventional refinance.

Dear Tim,

I would like to give you a “short synopsis” of where we are with our mortgage.  Wells Fargo is our lender, paying 7.5% interest rate, our home is worth around 160k but we still owe 188k, underwater.  We are unable to refinance because our credit is shot from balancing who we are going to pay this month.

We are current with our mortgage and have been for over a year.  I took a pay cut around 3 years ago, tried a few times for modification, unsuccessfully, because we “were current and not in imminent danger of foreclosure”.

Our mortgage is not Fannie or Freddie owned and we were also unable to be included in the mortgage settlement because we were told Wells Fargo didn’t own our loan but is the servicer.  I have contacted Wells Fargo upper management, my senator, attorney general, and alderman. I am usually passed along to someone else – HOPE, HAMP, making home affordable, etc.

I have been waiting since 2011 for some progress with HARP 3, with a folder FULL of correspondence back and forth with Wells Fargo about half a foot thick.  I am wondering since you ARE the mortgage “expert,” if there are ANY options for homeowners like us?

I believe around four of our neighbors’ homes are short-sales, two walked away within this past year and another next door to us is being foreclosed on.  We are struggling financially.  ANY advice, news, etc. I would sincerely appreciate it.  We have just about run out of options.

-Tracy

Hi Tracy,

Your story is all too common across the country. I’m sorry to say there aren’t many options right now. HARP is still only for Fannie/Freddie loans and there hasn’t been much progress on HARP 3.

But you are doing the right thing in keeping up with the mortgage payment at all costs. If any programs do arrive, they will only be for people who have made all their mortgage payments.

While there aren’t a lot of options, it’s not to say there zero options! Here are a couple ideas I had off hand:

1. You can use FHA to refinance up to 97.75% of your current value, even if you don’t have an FHA loan now. If your value does rise to 190k or so, this could be a real possibility. How did you determine your current value? It could be higher than you think. I would advise calling a local real estate agent to get their opinion. Typically they can give you a pretty good estimate of value for free, and you don’t have to spend hundreds of dollars on an appraisal. With all the short sales around you, it’s not helping your value, but you never know. Values have been increasing across the country, and you might be surprised.

2. If any owner on your home has military experience, you might be able to refinance with a VA cash-out loan up to 100% of current value. So as your home climbs toward your $188,000 value, this could be a real possibility.

3. My only other thought is hopefully your state will do something similar to what Oregon did – they rolled out their own HARP 3 program without Fannie/Freddie approval or Congress. It’s pretty incredible what they did. Oregon senator Jeff Merkley created a fund using federal Hardest Hit Funds that Congress allocated to states hardest hit by the housing crisis. What a great use of these funds. If other states would create similar HARP 3-like programs, we would see a lot fewer people in your position.

I would just encourage you to hold on and keep making your payment. I’m confident something will happen eventually, it’s just a matter of when.