New Year's Day has come and gone, but there's still one more resolution you should make: get a HARP refinance for your underwater or low-equity mortgage, if you haven't done so already.

But you need to act by the end of the year, when the program expires. If you don't, and you're one of the 800,000 eligible homeowners who still haven't refinanced, you'll be throwing away tens of thousands of dollars in mortgage savings made possible by the federal government.

The Home Affordable Refinance Program (HARP) offers an incredibly good deal for mortgage borrowers whose homes lost value during the downturn. It allows you to refinance your old, high-interest rate mortgage at today's low rates, even if your current home value or income would normally prevent you from refinancing.

Refinancing through HARP can provide an average savings of $2,300 per year in mortgage interest, according to the Federal Housing Finance Agency (FHFA), which oversees the program. Freddie Mac reports annual savings may vary from $1,200 up to $6,000, depending the size of one's mortgage and the rate they are currently paying. Borrowers who opt for a shorter term to lop several years off their mortgage payments can save even more.

Some 3.2 million homeowners have already refinanced through HARP, but surprisingly, one-fifth of those who would benefit and could qualify still have not done so - and time is running out. So if you're in that remaining 800,000, or are wondering if you might be, here's a rundown of the key points about the program

 

#1 - It's not a scam!!!!!!!

Surveys have found that one of the main reasons that qualified borrowers don't take advantage of HARP is that they're suspicious that it might be some sort of scam. That could be because 1) they've heard about bogus mortgage rescue schemes that seek to defraud homeowners; 2) it seems too good to be true; and 3) the program is being aggressively promoted by lenders, many of them fairly small and obscure, using direct mailings that unfortunately may call to mind other, more dubious promotions.

Here's the real deal: HARP is a program created by the federal government. It's run by the Federal Housing Finance Agency (FHFA) through the government-sponsored enterprises Fannie Mae and Freddie Mac. HARP refinances can only be offered through legitimate mortgage lenders authorized to offer Fannie Mae or Freddie Mac loan products - scam artists and fly-by-night operations need not apply.

 

#2 - It's not welfare!!!!!!

Some qualifying homeowners who might benefit from HARP may have refused to take advantage of it because they assume it's some sort of government handout. It's not.

The way it works is that Fannie Mae and Freddie Mac, who already back the mortgages that qualify for HARP refinancing, have modified their rules to allow lenders to Further information:

Published on January 5, 2015