Prospect Mortgage Sees Underwater Refinances Quadruple Following Government Refinance Program Changes

Prospect's participation is helping more customers who might otherwise be unable to refinance.

Oct 22, 2012, 06:00 ET from Prospect Mortgage

SHERMAN OAKS, Calif., Oct. 22, 2012 /PRNewswire/ -- Changes to the Department of Housing and Urban Development's Home Affordable Refinance Program (HARP), which offers underwater homeowners the opportunity to refinance at today's historically low mortgage interest rates, have increased HARP refinances at Prospect Mortgage to $201 million in its most recent quarter. The enhanced program (HARP 2.0) lets homeowners with little or no equity refinance to a lower rate and reduced payments.


HARP 2.0, which eliminated risk-based fees for borrowers electing shorter-term mortgages, allowed Prospect Mortgage to make guideline enhancements, such as removing the 125% loan-to-value (LTV) ceiling on fixed-rate mortgages backed by Fannie Mae and Freddie Mac. Customers can currently refinance a HARP loan with no LTV limit. Other government enhancements include extending the end date for HARP until December 31, 2013.

"Prospect Mortgage is excited to help homeowners stay in their homes and reduce their monthly expenses," says Doug Long, President of Prospect Mortgage Retail and Correspondent Lending. "We think HARP 2.0 is a significant improvement over the initial government refinance program launched in 2009. It's a great benefit for homeowners, and it has allowed our HARP refinances to grow tremendously. We expect growth to continue."

To participate in the HARP 2.0 program, borrowers must have a mortgage owned or guaranteed by Fannie Mae or Freddie Mac on or before May 31, 2009; not have been refinanced under HARP previously, unless it was a Fannie Mae loan refinance between March 2009 and May 2009; and be current on their mortgage payments with no late payment in the previous 12 months to 24 months, depending on the LTV. Borrowers with an LTV below 80% may be considered even if they have a second mortgage — for example, a 70% LTV and a 120% CLTV (combined loan to value ratio).

Even if homeowners are making payments to a servicer, such as a bank or credit union, they may still have a loan owned or guaranteed by Fannie Mae or Freddie Mac that qualifies under HARP 2.0. To check the loan qualification status, borrowers can go online to or Or they can call 1-800-732-6643 for Fannie Mae or 1-800-373-3343 for Freddie Mac.

"Owner-occupied houses, secondary residences, and investment properties may all be considered for HARP refinancing," says Long. "There are many HARP refinancing scenarios available, so we encourage homeowners to investigate their options by reaching out to us. This is a great program offering many the opportunity to stay in their homes and reduce their monthly costs."

Prospect Mortgage is a leading national lender offering a full range of quality home loans, including FHA and VA, conventional, jumbo and super jumbo, renovation, and more. It is backed by Sterling Partners, a private equity firm with approximately $5 billion of assets under management and offices in Chicago, Baltimore, and Miami. For more information about Prospect Mortgage, visit Visit Prospect on Twitter at and follow the company on Facebook at

SOURCE Prospect Mortgage