HARP 2 – Lifeline for Some Troubled Homeowners?

The government is changing its Home Affordable Refinance Program (HARP), making it easier for homeowners to refinance their underwater, high-interest mortgages.

HARP 2 – Major Features

• Although HARP has helped more than 890,000 homeowners nationwide by reducing their monthly mortgage payments, there are still millions of homeowners who are too far underwater to participate.
• Under the new rules, homeowners who owe more than 125 percent of the market value of their homes will be allowed to refinance into new loans.
• The program also streamlines the refinancing process for homeowners who are current on their mortgage payments and reduces or removes fees that previously hindered them from refinancing.
• Fannie Mae and Freddie Mac also will reduce the fees they charged in the past to enable borrowers to better afford the new loans.  Among the fees that will be reduced or eliminated are those for appraisals, title insurance, and closing costs.
• Fees also will be waived for some underwater borrowers who are refinancing into 20-year or shorter-term loans.
• HARP is only open to borrowers who are current on their payments for the past six months with no more than one missed payment in the past 12 months.  The loans must have been originally issued before May 31, 2009, and purchased by Fannie Mae or Freddie Mac.

HARP 2 – The Truth As I See It

• Fannie Mae and Freddie Mac  have so far received $130 billion in direct taxpayer aid since 2008.  In 2009 and 2010 — the two full years of government ownership, the heads of Fannie Mae and Freddie Mac were paid a total of $17.1 million. So, it’s not just the Wall Street Crowd making obscene salaries.
• The new program does not address the fact that many who buyers purchased homes during the boom, did so with a combination of the first and second loan. This new program does not address how such homeowners with two loans will be able to refinance.
• This program only applies to loans that are held by Frannie Mae or Freddie Mac.
• Also, the program does not address the homeowner who may qualify under this program, but, who owns a condominium where the condominium complex itself, due to low owner occupancy or inadequate reserves may not qualify under the current Fannie Mae and Freddie Mac condominium requirements. Some of these condo requirements are that 50% of the units in the complex must be sold or in contract; that 70% of the units are currently owner occupied; that adequate reserves are being maintained and that no litigation involving the condominium association exists.