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HARP 2.0 Refinance After Bankruptcy?

By Liz Clinger Updated on 12/22/2014

Can you still get a HARP loan if you have had bankruptcy or foreclosure in the past?According to the HARP guidelines set by Fannie Mae, the HARP program does not inherently restrict borrowers who have undergone or The HARP program imposes no waiting period whatsoever for borrowers who have managed to keep up with mortgage payments for six months and haven’t made any delinquent payments for the twelve months prior to the application.

Although HARP approval after a bankruptcy or foreclosure may be simpler than borrowers would expect, this does not necessarily mean that borrowers should immediately apply for a refinance. Though lenders may be lenient when approving borrowers, they may also offer much higher interest rates than would be available for borrowers with better credit standing. With homeowners only able to perform one HARP refinance, borrowers should carefully consider whether it would be more advantageous to apply for a HARP refinance straightaway or attempt to raise their credit prior to applying.

HARP Versus Bankruptcy or Foreclosure

Some borrowers may consider “strategic” bankruptcy or foreclosure an alternative to the HARP refinance, due to the fact that these events significantly reduce the borrower’s debt and monthly payments; however, doing so is much more detrimental than advantageous. Not only will these events cause borrowers a substantial amount of stress but they will leave a lasting impact on borrower credit score. Consequently, borrowers should always choose a HARP refinance or HAMP loan modification over bankruptcy or foreclosure. In order to evaluate whether to use HARP or HAMP, read our article.

About The Author:
Liz Clinger
Liz Clinger has multiple years of experience in the mortgage and real estate industries as an internet marketing professional... more

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