HARP 2.0 available to all borrowers?by Tim Manni
By now, we all know HARP’s history: It was released with grandiose expectations in 2009, and for years, fell short of achieving the goal of helping millions refinance.
To rectify the failed attempt at helping millions improve their mortgage, Fannie Mae and Freddie Mac officially rolled out an updated and expanded version of the program in March dubbed “HARP 2.0.”
HARP 2.0 took a struggling refinance effort and put it back on the map. Need proof? The proof is in the numbers.
According to the Federal Housing Finance Agency’s July Refinance Report, more than 519,000 Fannie, Freddie loans were refinanced under HARP since the start of 2012. This “new milestone” was achieved in part because HARP 2.0 has removed all underwater restrictions, reduced or eliminated fees for certain borrowers and has peeled back some restrictions and penalties for lenders. Of course, it was also achievable because mortgage rates continue their foray into record-low territory.
HARP’s success could grow greater
Despite the increased interest in the HARP program, some lawmakers believe the program has even more room to grow.
Senators Robert Menendez (D-N.J.) and Barbara Boxer (D-Calif.) have reintroduced a bill that would essentially revamp HARP 2.0 allowing even more borrowers to participate.
While no one has dubbed the senators’ plan as HARP 3.0 (the bill was first introduced back in May and referred to the Senate Banking Committee where it apparently died, according to Mortgage News Daily), several of the proposed improvements make a lot of sense.
Here are the proposed updates/improvements:
- All current Fannie, Freddie borrowers can participate, even those with LTVs under 80 percent
- Completely eliminate up-front fees on all HARP refinances
- Current lenders and new lenders will face the same underwriting criteria and reps and warranty rules
- Eliminate all appraiser costs for refinancers
- Streamline the refi process even more by no longer requiring borrowers to prove they’re employed
Readers: is this a win-win or a waste of time?