President Obama and HARP 3.0 aka #MyRefi

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HARP 3 0

With the re-election of President Obama, in my opinion, the odds of HARP 3.0 becoming a reality improved. HARP is an acronym for the Home Affordable Refinance Program. HARP was created to help home owners who would qualify to take advantage of today’s extremely low mortgage rates and refinance except their homes have lost equity. HARP is available for mortgages that were securitized by Fannie Mae or Freddie Mac prior to June 1, 2009. We are currently on version “HARP 2.0″ which was offered expanded guidelines from when HARP first rolled out. For more information about HARP 2.0, click here.

At the beginning of this year, HARP 2.0 was expanded in phases to make the program more available for employed and credit worthy home owners. Fannie Mae and Freddie Mac reduced the requirement for appraisals and made efforts to make the program more for banks and lenders to offer. However, many banks and lenders have not fully adopted HARP 2.0 guidelines as created by Fannie Mae and Freddie Mac. Some will only offer HARP 2.0 home owners who currently have their mortgage serviced by that bank (where they make their mortgage to). And some lenders have limited what types of HARP 2.0 loans they will accept, for example, refusing to offer HARP 2.0 on loans that have existing private mortgage insurance or LPMI. Or by adding overlays to loans they will accept with limits to loan to value or not accept Fannie Mae or Freddie Mac appraisal waivers. Some wholesale lenders are offering HARP 2.0, however, the demand is so great for these borrowers that it’s not unusual for HARP 2.0 refi’s to take several months to close.  In fact a couple of the these wholesale lenders who were accepting HARP 2.0’s with higher loan to values or pmi have either stopped accepting applications until they can catch up with what they currently have in process.

President Obama and members of Congress have been pushing for a refinance program that would go beyond HARP 2.0. This program has been nick-named HARP 3.0 and has been assigned a hashtag of #MyRefi by the White House.

It is anticipated that HARP 3.0 will have many of the same features available with HARP 2.0 along with:

  • expanding or eliminating the Fannie Mae/Freddie Mac securitization cut-off date of May 31, 2009;
  • open to mortgages that are not securitized by Fannie Mae or Freddie Mac, including qualified borrowers who used jumbo, subprime or other alternative programs. 
  • allow borrowers who have refinanced under earlier versions of HARP to refinance again;
  • expand loan amounts to previous conforming high balance limits. Borrowers in the greater Seattle area with loan amounts at the previous conforming high balance limit of $567,500 may qualify for HARP 2.0, however, they often need to bring in cash to close with the current King County loan limit set at $506,000.

President Obama’s refi plan would probably look more like an FHA refinance and would be available to home owners who have lost equity in their home and have made their mortgage payments on time for the last six months. President Obama has been pushing for programs to become more available to home owners so they they can take advantage of today’s lower rates and help our economy.

When and if HARP 3.0 #MyRefi becomes available to Washington home owners, I will be sure to announce it here!  To stay informed, you can subscribe to my blog, follow me on Twitter or “like” me on Facebook.  For a mortgage rate quote or to start a loan application for a refi on your home located any where in Washington state, where I’m licensed, please click one of the links above.

Comments

  1. Rhonda,

    Would a HARP 3.0 program potentially include those with conventional loans and give them access to the same refinancing programs as those currently extended to folks with Fannie & Freddie backed mortgages?

  2. Michelle W. says:

    I welcome the extended program, as I feel every RESPONSIBLE homeowner should have the ability to take advantage of it. However, I have 2 problems with the whole thing.

    First, they have designed a program that has guidelines that aren’t being enforced. What’s the point of setting up the program guidelines if the mortage lenders can add the ‘overlays'; as they are being called, which ultimately ends up preventing most from being able to refi? If you’re going to make the rulesl; enforce them!

    Second, there are people like myself who were forced into a 2nd mortgage situation; because of the market changes between the time of the pre-contracted ground breaking and closing for my new home. The 2nd mortgage loan is what hangs over my head everyday and could potentially ruin my financial stability.

    I’ve never been late on my mortgage, pay all my bills and live paycheck to paycheck. Because of this, I’m denied over and over. No relief for those who do right!

    Between a Rock and Hard Place!

    • I think it would be pretty challenging to force a bank to not add underwriting “overlays”, Michelle. And they are not rules – they’re guidelines. I do agree it’s frustrating when each lender or bank seems to have their own overlays and what they will or won’t do… especially when some banks won’t help their current clients.

      Second mortgages are also challenging because in order for your refinance to be a success, they must agree to subordinate their lien position…which is something they don’t have to do. Most second mortgages are cooperating with HARP and permitting the subordination to take place.

  3. Do you have any idea when HARP 3 will be approved by congress. I am waiting for this program become realty.

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