Can HARP help Las Vegas?

Q: President (Barack) Obama just came to town and made a big announcement about this HARP program that is supposed to help people who are underwater in their homes. Do you think this is really going to help homeowners here in Las Vegas?

-- Mike L., Las Vegas

A: That has been a hot topic since Oct. 24. That's when President Obama visited a neighborhood on the east side of Las Vegas and announced changes to the federal government's mortgage program called HARP, or Home Affordable Refinance Program.

I've had several conversations about this with fellow Realtors and local housing experts. The consensus view seems to be that this revamped mortgage program may help a small percentage of local homeowners who need it. But, like most such programs, it probably won't be a game-changer here in Southern Nevada.

Most homeowners in Southern Nevada are now "underwater," meaning they owe more on their mortgage than their home is currently worth. This prevents them from refinancing their home at today's historically low mortgage interest rates.

HARP was designed to reduce monthly payments for such troubled homeowners by offering them a new loan at a lower interest rate. It can also help them replace an adjustable-rate or interest-only loan with a fixed-rate loan. It does not necessarily address what many housing experts see as the real issue: the principal balance owed on the mortgage.

Here are some key aspects of HARP:

• The original program was designed to help borrowers with a balance on their first mortgage of up to 125 percent of the current value of their home.

• So far, it has helped relatively few homeowners refinance their loans nationwide, and fewer still in Nevada.

• It was originally set to expire in 2012. It is now being extended through the end of 2013.

• The new program will roll out in phases, starting with loan applications dated Dec. 1, 2011, or after. For borrowers who are more than 125 percent underwater, the start date will reportedly be in the first quarter of 2012.

• In most cases, homeowners participating in this new program will no longer be required to obtain an appraisal on their home.

• To qualify, homeowners must have paid their mortgage payments on time for at least the last six months. They must not have missed more than one payment in the past year.

Borrowers can't be in foreclosure and must not have filed for bankruptcy. (This limits the impact in the Las Vegas area, where we have the nation's highest foreclosure rate and many distressed homeowners have stopped paying their mortgage, sometimes based on advice from attorneys or others who have been hired to help them seek loan modifications.)

• The existing mortgage on the home must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.

• The original loan can't be a subprime loan or a pay option adjustable-rate mortgage (or "pick a pay") loan.

The program could help some troubled real estate investors refinance a second home or investment property. The property can be a single-family home or a condo.

It's also worth noting that lenders don't have to participate in this program. The nation's four largest mortgage lenders have indicated that they may participate, but each bank can make changes to create its own version of the program.

This may confuse and complicate the process. We should know more by Nov. 15, when the Federal Housing Finance Agency has promised to release more details about HARP.

Meanwhile, to find out if your loan is owned by Fannie Mae, visit FannieMae.com/loanlookup/ or call 800-732-6643. For Freddie Mac, visit FreddieMac.com/corporate or call 800-373-3343.

Paul Bell is the president of the Greater Las Vegas Association of Realtors and has worked in the real estate industry for 30 years. To ask him a question, e-mail him at ask@glvar.org. For more information, visit lasvegasrealtor.com.