One of the key requirements that makes you eligible for a HARP refinance is that you have paid your existing mortgage on-time for the past 12 months. This means that responsible homeowners (mortgage holders) are now eligible to refinance their home even if they owe more than their home is worth. So why doesn’t your current mortgage company want you to know about HARP?
The reason is rather simple. If you refinance using HARP your existing mortgage company will lose money.
How do they lose money? Until recently, responsible homeowners paid their mortgage regardless of other economic and financial factors or hardships. Banks and mortgage servicers love borrowers like this because they know they can’t refinance and they are paying older higher interest rates. We call this the “high interest rate trap.”
If a customer does a HARP refinance with another bank the existing mortgage servicer loses that loan, the interest you were paying on it, and most likely you as a customer.
How about a little ‘Role Reversal’… So, if you reverse the roles and you are now the bank, why would you want to let your borrower’s, who have been paying on-time at higher interest rates, know about HARP? You probably wouldn’t.
Just like anything else in life, we don’t mean to lump every financial institution into the same category. We are sure there are some companies out there promoting HARP and trying to help out their existing company base. Even if it is for the simple fact that by offering their existing customers a HARP refinance they build loyalty and customer retention.
We have to remember that banking is a business, and these banks have a right to make profits. We just have to hope banks and mortgage servicers are able to find an appropriate balance between doing good business for their shareholders and their customers alike.
If you haven’t already done so, now is the time to find out if you qualify for a HARP loan. You may be able to drastically reduce your interest rate and mortgage payment. Many homeowner’s have seen their payments drop by hundreds of dollars per month. What could an extra $300 per month do for you and your family? It’s time to find out!