The HARP refinance program was launched in 2009 as the administration’s effort to stimulate the economy by helping underwater homeowners get a timely, lower rate refinance.
A large number of homeowners have continued to remain current on their mortgage payments despite the declining values in their homes and/or changes in income and employment. The HARP 2.0 refinance program rewards those homeowners for their continued efforts to pay their mortgages on time.
The original HARP refinance program has helped almost 1 million homeowners, but the original goal was to help 7 million, so the HARP program was revamped and re-released a couple of years after the initial program. The revised version of the refinance program is commonly known as the HARP 2.0 refinance program and has opened the doors to refinancing to all underwater homeowners with LTV rates as high as 125%
Still, some borrowers are in need of HARP 3.0 because many borrowers fail to meet certain qualifications under current regulations.
As of now, borrowers whose mortgages are currently backed by Fannie or Freddie are the only borrowers that qualify for HARP 2.0 – also, the mortgage must have been bought by Fannie or Freddie by May 31st, 2009.
A proposal for a HARP 3.0 refinance program would also include mortgages not backed by Fannie Mae or Freddie Mac. HARP 2.0 excludes loans on the market that are backed by private investors because they do not have to adhere to certain government regulations the way Fannie and Freddie do. It would cost the government billions if it had to step in and back the remaining private investor mortgages. The biggest win for homeowners would be the moving of the May 31st, 2009 deadline to May 31st, 2010. Many otherwise qualified homeowners missed the deadline by a few days or a couple weeks; extending the deadline would be a major help for homeowners across the country who fall into this category.
Chris Brown is the premier expert on HARP loans and Government FHA and VA loans. Please visit The Mortgage Chili Blog