Friday, June 29, 2012

HARP 2.0... A Success Story

When Home Affordable Refinance Program (HARP) was solidified in March 2009 there were plenty of skeptics. As each phase rolled out many still set up camp in the mindset that HARP was nothing but hype. There were only a sprinkling of qualified borrowers, in fact, FHFA estimated that 894,000 borrowers were successful with a refinance as of August 31, 2011 when "HARP 2.0" was announced. This number pales in comparison to the estimates that were originally projected that HARP could help. 
"The Home Affordable Refinance program will be available to 4 to 5 million homeowners who have a solid payment history on an existing mortgage owned by Fannie Mae or Freddie Mac, but have a loan-to-value ratio of 80% to 105%." -FHFA 
No matter what we call it... HARP, Refi Plus, Expanded Refi Plus, or even Freddie Relief we hadn't seen much evidence HARP was getting the job done. Starting out we were capped at 105% then saw an increase 125% a year later. Each of these limits seemed generous enough however we found it tough to place loans because most lender overlays required the same servicer in order to refinance. I had turned borrowers away more than I could get them approved. With each expansion that came more underwater borrowers were able to take advantage of the program but the program still fell short. Now that it has morphed into HARP 2.0 the unlimited loan to value is making a little more headway. 

One of my borrowers is testimony to the history of HARP. She stuck it out with me through the years as we patiently waited to afford her a lower mortgage payment. We tried at first but with the lender paid MI she would have to deal her current lender. She applied with them and was denied because her LTV was at 107% bu their standard which was just 2% over what the current guideline was. A year later we had the same issue... just barely edged out, we were beginning to think it was a conspiracy. This spring the stars aligned, lenders were now allowing the lender paid MI certs to be transferred and 2.0 was set to roll out in March. Finally, we got our appraisal waiver and the MI transfer!! With a few bumps to get past and long turn times in underwriting we got through it. We funded her refinance a couple of weeks ago and the savings, huge... Nearly $500 per month! Needless to say she is relieved.

Still many are left in the boat she was in, waiting... now for HARP 3.0. My last post on #MyRefi sets the wheels in motion for the next journey. The goal is to expand HARP to include loans not currently backed by Fannie Mae or Freddie Mac. This is gaining speed thanks to the help of social media over the last few days and please don't get me wrong it is a great idea. We should aim to help as many people as possible, yet I have concerns with the promise of less red tape and lower fees. HARP will have to mimic the Government Streamline products if there are to be less hoops to jump through, a tough pill for investors to swallow. Unfortunately with lower costs will come a rise in rate... originating, processing, underwriting, docs, closing, and funding takes people and that labor isn't free... it has to come from somewhere. #justsayin

To apply for this or any other loan program contact me today!

Additional Resources:

Making Home Affordable

Disclaimer: Freddie Mac and Fannie Mae have adopted changes to the Home Affordable Refinance program (HARP) and you may be eligible to take advantages of these changes.  
If your mortgage is owned or guaranteed by either Freddie Mac or Fannie Mae, you may be eligible to refinance your mortgage under the enhanced and expanded provisions of HARP.
You can determine whether your mortgage is owned by either Freddie Mac or Fannie Mae by checking the following websites:

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