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What is the HARP 3 / #MYREFI and Who May Qualify?

September 28, 2012

HARP, Refinancing

More talks of a HARP 3/ #MYREFI program is taking place and the talks are growing louder.

It’s rumored that the program was made in January this year and it was conceptually introduced in the president’s State of the Union address. Since that time of introduction in January, the idea of allowing all otherwise qualified, responsible homeowners the ability to refinance to the current low rates has gained traction.

What is The HARP Refinance Program?

The Jacksonville, Florida HARP Refinance program is a government-backed program that was launched in 2009. The Home Affordable Refinance Program was released to serve as an economic stimulus, by helping American homeowners that keep current despite their falling home values, to refinance. Mortgage rates were falling at the time but only a few homeowners were able to take advantage of those rates by refinancing with the HARP program because of the program’s still relatively restrictive requirements such as the loan-to-value requirements that was at 125% hard cap limit.

The program fell short of its target number of homeowners helped. It was aimed to help over 7 millions homes but only reached 900,000 after 2 years since its initial launch. So, in response to this, the government revised the program.

In 2012, dubbed HARP 2.0, the Jacksonville, Florida HARP refinance program was expanded with major changes on requirements that barred many homeowners to a refinance. Since the revisions made, the HARP refinance program has been gaining momentum and having a tidal wave of refinance applications getting passed.

Check My Florida Harp 2.0 Eligibility

Changes made:

  • All loan-to-value requirements were waived
  • Proof of income requirements were waived
  • Proof of asset requirements were waived
  • Minimum credit score requirements were waived
  • HARP 2.0 won’t even ask for a home appraisal in most cases

The Jacksonville, Florida HARP 2.0 refinance program is a mortgage product that has the least restrictive requirements out in the market. Borrowers will encounter little refinancing hurdles as long as they meet the basic requirements :

  • Must have less than 20% equity in your home
  • Must have  no late payments and have paid your loan on-time for the last 6 months
  • Must have been securitized before the June 1, 2009 deadline
  • Must have mortgage that is backed by either Fannie Mae or Freddie Mac

Talks of a HARP 3 are getting louder and it is rumored that loans not backed by Fannie or Freddie are getting major consideration in the talks; the Fannie- or Freddie-backed mortgage requirement might be changed, allowing homeowners with non-GSE mortgages to refinance.

Help For Non-GSE Mortgages

HARP 3.0 is still in talks and hopefully will be released eventually. Momentum for a release in some version of a HARP 3 program is growing. HARP 3.0 would focus on helping homeowners whose mortgages are specifically not supported by Fannie Mae or Freddie Mac.

Unlike in the past decade when non-GSE lending was a major part of the U.S. housing market, the mortgage giants Fannie Mae, Freddie Mac, and the FHA control more than 90% of today’s new mortgage originations.

Take for example, in 2005, Alt-A mortgages made up 27.5% of mortgage originations. Today, these homeowners cannot refinance through HARP. But when HARP 3 would be released, finally these Alt-A customers would be allowed to refinance their home loans.

Check My Florida Harp 2.0 Eligibility

And, lastly, homeowners with jumbo mortgages that are not considered jumbo in today’s market, are going to be helped much by the possible HARP 3.0 refinance program.

For example, in the past decade, when conforming loan limits were not yet at $625,500 in “high-cost areas” throughout California, Virginia, Maryland, and New York, American homeowners who bought or refinanced were relegated to non-conforming loan products.

After the decline of home values, homeowners with that mortgages that met Fannie Mae loan standards and were within Fannie Mae loan limits, were still unable to use HARP 2.0 refinance program because their mortgages weren’t supported by the government. Banks such as Wells Fargo or Bank of America hold these homeowners’ mortgages.

With the possible release of the HARP 3.0 refinance program, these “high-cost”, jumbo homeowners would get an opportunity to refinance.

Who Can Qualify For HARP 3?

It is not known when HARP 3.0 will be made official. We can’t tell who exactly will qualify for HARP 3.0 when it’s passed. But we can make guesses based on HARP history and talks from Washington, D.C..

These are the types of borrowers that HARP 3 would most probably target:

  • A self-employed person who used stated income loan for the original mortgage, and can verify their current income via federal tax returns
  • A “prime” borrower who used a sub-prime mortgage because mortgage rates were lower and/or fees were less as compared to a conforming one
  • A wage earner who used a stated income and/or stated asset mortgage for convenience
  • Sub-prime borrower who has paid mortgage as agreed and can verify income and assets
  • An Alt-A borrower whose FICOs were low at date of origination, but have since improved
  • A jumbo mortgage homeowner who lives in a “high-cost area” whose original mortgage was for between $417,000 and $625,500

HARP 3.0 would be a great product if were finally released. It’s like a HARP 2.0 to homeowners who used private-market mortgage money.

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Chris Brown
Chris Brown is the premier expert on HARP loans and Government FHA and VA loans. Please visit The Mortgage Chili Blog

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About Chris B.

Upside down? Call Chris Brown. 321.300.loan [5626] FHA Streamline Refinances - www.FloridaStreamlineRefinance.com Harp Refinances - www.FloridaHarpGuide.com Harp 3 Inquiries - www.budurl.com/Harp3 Purchase Pre-Qualification - www.FreeScenarioReview.com

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Chris Brown
Chris Brown is the premier expert on HARP loans and Government FHA and VA loans. Please visit The Mortgage Chili Blog