HARP II – The Home Affordable Refinance Program has released the updated program guidelines.
St Paul, MN: The HARP program, while not perfect, has been one of the few success stories in the governments attempt to help home owners. HARP has helped close to 1,000,000 homeowners refinance, and a few tweaks to the program have just been announced. No one who closely follows the mortgage industry is expecting HARP 2.0 to generate much in the way of additional refinance opportunities in the real world over the existing HARP program – but HARP IS STILL AN AWESOME PROGRAM for those who qualify.
That view seemed to be reinforced after yesterday’s release of the specific program guidance from both Fannie Mae and Freddie Mac to lenders (see links to release below)
It appears the updated HARP programs latest program changes and enhancements aimed at allowing underwater borrowers with Fannie / Freddie mortgages to take advantage of low mortgage rates don’t appear to represent a major departure from the old requirements.
The updated basics are that the loan to value cap has been lifted, certain fees in certain situations have been removed and for borrowers who have loans owned by Fannie or Freddie and who have not been delinquent more than 1 x 30 days in the past twelve months (0 x 30 in the most recent six months) they may find refinancing available to them even if they are underwater on their mortgage to equity ratio.
However, until March 2012 Fannie and Freddie will not even accept delivery of any loan with an LTV > 125%. And, the new loan program continues to be available only to borrowers whose loans are owned by Fannie Mae or Freddie Mac on or before May 31, 2009.
Given the lifting of the Loan-to-Value cap as a major selling point, it appears that since nothing above 125% can be delivered before March this will hamper a program that already has performance characteristics that may make it unavailable to many who could really use the program.
While a handful of lenders who offer HARP already have started to promote HARP refi opportunities, it seems a bit premature as it remains to be seen who lenders will actually implement the new guidelines. Remember, lender overlays play a huge rule in today’s mortgage world. Just because Fannie Mae, Freddie Mac, FHA, VA, or any other program says lenders can, doesn’t mean they will.
Time will tell over the next few months as lender roll out their actual guidelines. Stay tuned.