Politics & Government
HARP Revisons to Benefit More Home Owners
Changes planned for Homes Affordable Refinance Program (HARP) should make it easier for more homeowners to refinance their mortgages.
By Mike Koebel, Guest Columnist
“I Want One of Those Obama Refi’s!”
This was the opening statement in a telephone call to a mortgage lender earlier this week, after the announcement of HARP 2.0 (Home Affordable Refinance Program). The 1st HARP program fell far short of helping the number of underwater (owe more on your mortgage than the value of your home) homeowners than hoped for by the government. Thus, the Obama administration has asked that the program be tweaked to include improvements so that more homeowners will be helped.
Find out what's happening in Bradentonwith free, real-time updates from Patch.
Although details of HARP 2.0 have not been fully announced, some anticipated improvements are:
- In the 1st HARP, the underwater limit was 125%. In HARP 2.0, it appears there will be NO limit.
- Fees could be reduced – e.g. an automated appraisal may be allowed vs having to pay for a new report
- There will be no “buyback” requirement, where the originating lender would have the possibility of taking back this loan from FannieMae or FreddieMac and having to reimburse them, if the borrowers went into foreclosure.
The buyback requirement in the 1st HARP program caused many lenders not to want to participate, leaving those lenders who did participate with huge, overwhelming demand. Add to that the underwater limit of 125%, and the probability that the appraisal would even further cause the borrower(s) not to qualify because of getting an appraisal that did not give the value to keep the underwater limit at or below 125% - well, you get the picture.
Find out what's happening in Bradentonwith free, real-time updates from Patch.
The intended effect of these (and probably other) improvements is designed to enable millions of underwater homeowners to get better terms on their mortgage to help them prevent foreclosure The mortgage must be currently owned by FannieMae or FreddieMac, and cannot have been refinanced under the 1st HARP program. The full details are to be announced by November 15, with applications to be taken beginning December 1.
____________________________________________________________
Mike Koebel Senior Mortgage Consultant with Home Lending SourceContact Mike with mortgage questions or requests:
Direct: 941.792.2125
Email: mtgmik@mindspring.com
