A new mortgage bill that is very much like HARP 3.0 has been introduced recently. The Responsible Homeowner Refinancing Act of 2013 that has been introduced in congress recently is said to remove certain closing costs, including the cost of home appraisal, and the bill will also make it simpler for homeowners to “change servicers” through the Orlando, Florida HARP refinance program.
The Orlando, Florida HARP refinance program has been around for some time. The HARP refinance program was originally released in February 2009 as the government’s push to improve the economy. The HARP refinance program, has helped underwater homeowners whose mortgage loans are held by Fannie Mae and Freddie Mac, get the opportunity to refinance into new lower mortgage without having to incur new private mortgage insurance costs.
A homeowner who loses equity after putting 20% down on a home, could refinance without requiring PMI by using the HARP refinance program.
Since the original HARP’s release in 2009, it hasn’t come close to its goal of giving timely refinance to 7 million homeowners. It did help close to a million in the span of two years but far from the 7 million mark that was aimed at. So in 2011, Orlando, Florida HARP refinance program was revised and is now the program that many know and call as HARP 2.0. In a little over 2 years, the original version of the HARP refinance program reached one million U.S. households. The HARP 2.0 refinance program did just the same in only eight months. With the Responsible Homeowner Refinancing Act of 2013, even more U.S. homeowners are expected to be reached and aided to get the chance to refinance.
The original Orlando, Florida HARP refinance program has a loan-to-value restriction which hindered several families from getting a refinance. The original HARP’s 125% maximum LTV limitation was waived in HARP 2.0. This allowed for unlimited loan-to-value thus HARP 2.0 also being known informally as HARP unlimited. This helped out lots of homeowners get access to HARP in the most hard-hit states such as Florida and Nevada. In these states that were affected most, home values dropped as much as fifty percent or even more.
The new Home Affordable Refinance Program added loan fee caps for homeowners whose mortgages exceeded a certain loan-to-value; and for homeowners refinancing into a 15-year fixed rate loan; in order to further help such underwater homeowners.
What’s new with the Responsible Homeowner Refinancing Act of 2013?
Via the Responsible Homeowner Refinancing Act, all HARP borrowers can enjoy reduced upfront loan fees. The new HARP bill proposes to level out fees for all eligible homeowners.
The current system has borrowers with ultra-high LTVs (which typically represent a higher risk than an 85% LTV loan) be subjected to fewer upfront closing costs compared to borrowers with loan-to-values between 80 and 105% .
The Responsible Homeowner Refinancing Act would waive income and employment verifications from the HARP approval process.
The current Orlando, Florida HARP 2.0 refinance program does have less restrictive requirements on both issues. The new HARP would make the approval process much easier for homeowners regardless whether employed, unemployed; earning verifiable income, newly commissioned, or without wages, your HARP approval will be unaffected.
Following a similar philosophy to the FHA’s policy on the FHA Streamline Refinance, the Responsible Homeowner Refinancing Act suggests that a good payment history trumps the need for income and employment verification.
The current method used for home appraisals is expensive. The Menendez-Boxer Bill would require Fannie Mae and Freddie Mac to create less costly alternate home appraisal methods. Currently, Fannie Mae and Freddie Mac allow for automated appraisals which show values within a certain “expected range”.
A number of other changes to the existing HARP 2.0 program guidelines are proposed by the Menendez-Boxer Bill. Qualification looks mostly identical except for a program extension date.
Here are some basic requirements to meet :
- Mortgage should be currently owned or guaranteed by Fannie Mae or Freddie Mac
- Mortgage securitized by Fannie Mae or Freddie Mac on or before May 31, 2009
- Mortgage which has not been previously refinanced via HARP, except for Fannie Mae loans refinanced under HARP between March and May 2009
- Mortgage with a loan-to-value ratio of 80% or greater
- Mortgage which is current and with perfect payment in the previous 6 months
The bill also proposes to extend the HARP expiration by one calendar year to December 1, 2014.
Chris Brown is the premier expert on HARP loans and Government FHA and VA loans. Please visit The Mortgage Chili Blog