During the financial crisis of 2008, home values collapsed almost 50% from their highs. And even though rates were at historic lows, people were not able to refinance because they had no equity in their property. In response, the government allowed loans backed by Fannie Mae and Freddie Mac to be refinanced – even if they had no equity – without paying monthly mortgage insurance.
The HARP program does have some stipulations, though. Your current loan must be owned by Fannie Mae or Freddie Mac, it must have been in place prior to 5/31/2009, you must be current on your mortgage, and you must qualify as normal on the basis of your credit and collateral.
To find out if your loan is backed by Fannie or Freddie you can go to: