Fannie Mae and Freddie Mac have announced they will start using the Note date to determine if a mortgage qualifies for a HARP refinance in order to make things more transparent for borrowers. Both Fannie and Freddie are standing firm with the date of May 31, 2009. At least the NOTE date is something a borrower can find instead of using the date Fannie Mae or Freddie Mac securitized the mortgage (which the borrower has no control over).
If you have been waiting for Congress to pass HARP 3.0 or have been previously turned down for a refinance because of lost equity in your home, you might consider trying to refinance again.
Today President Obama answered questions submitted by social media savvy Americans which was moderated by Zillow CEO, Spencer Rascoff. It seemed to me the most common questions were concerning HARP 3.0. HARP 3.0 (Home Affordable Refinance Program) is currently a hypothetical expanded version of HARP 2.0 and would allow for more home owners, including those in Washington state, to refinance their homes at present low rates.
Here’s your opportunity to ask President Obama your question related to housing, including mortgages. Are you wondering why we don’t have HARP 3.0 yet? Or perhaps why HUD does not allow an FHA streamline refi to a shorter term if it increases the payment (even if the borrowers qualify for the increased payment)? Maybe you’re wondering why would bank and credit union loan officers only be registered and held to the same standards as a licensed loan officer?
Insider Mortgage Finance recently posted this teaser indicating that President Obama is pushing for the eligibility dates for HARP 3.0 to be expanded.
“The Obama administration has sent a message to the mortgage industry that it wants to expand the Home Affordable Refinance Program by changing the eligibility date for high loan-to-value and underwater borrowers who want to refinance loans financed by the government-sponsored enterprises. According to members of the Mortgage Bankers Association who attended a recent pow-wow at the White House, the administration wants to push the eligibility date for HARP into mid-2010 or so”
I say “teaser” because in order to read the full article, you need to $ubscribe.
The odds of HARP 3.0 becoming a reality may be better should President Obama’s nomination of Representative Watt to head the FHFA become a reality.
Currently many home owners who had their mortgage securitized by Fannie Mae or Freddie Mac June 1, 2009 or later have not been eligible for a Home Affordable Refinance (HARP).
HARP allows home owners who have lost equity and who would otherwise qualify, to refinance at today’s very low interest rates.
Having the securitization date expanded (if not removed completely) would be of great relief to many Washington state home owners.
Last week, Senators Boxer and Menendez reintroduced a bill to Congress that would allow more “responsible home owners” to refinance under the Home Affordable Refinance Program (aka HARP 3).
The current average interest rate for a 30-year mortgage is 3.53 percent – a rate that remains near its historical low. Nevertheless, there are nearly 12 million homeowners with loans guaranteed by Fannie Mae and Freddie Mac who could benefit from refinancing, many of whom cannot refinance at a lower rate because of unnecessary red tape and high fees. That red tape has limited competition among banks, so borrowers – even those who are able to refinance – end up paying higher interest rates than they would if they were able to shop around.
Under the Administration’s current refinancing program (HARP), an average homeowner saves about $2,500 per year. This bill would increase the amount they could save and expand refinancing opportunities for millions of eligible borrowers.
S. 249, The Responsible Homeowner Refinancing Act of 2013 removes the barriers preventing these Fannie Mae and Freddie Mac borrowers from refinancing their loans at the lowest rate possible. The bill would:
Ensure that streamlined refinancing is available and consistent for all Fannie and Freddie borrowers, regardless of whether they are underwater or not
Reduce up-front fees on refinances
Eliminate appraisal costs for all borrowers
Remove additional barriers to competition
Extend HARP by one year, to allow eligible borrowers more time to access the program.
From this press release, I’m not seeing where this bill would help responsible home owners who do not have mortgages securitized by Fannie Mae or Freddie Mac nor am I seeing that this bill would remove the requirement that the mortgage be securitized prior to June 1, 2009.
Stay tuned…I’ll continue to keep you posted.
An article published today by Bloomberg Businessweek gives some hope of HARP 3.0 and #MyRefi (aka the Obama Refi) becoming available to underwater home owners.
Many responsible home owners who have not been able to refinance under the current guidelines of HARP 2.0 because either their existing home mortgage was securitized after June 1, 2009 by Fannie Mae or Freddie Mac OR because their existing mortgage is not securitized by either Fannie or Freddie.
The Home Affordable Refi Program was created to help home owners who have lost equity in their homes and would otherwise qualify to refinance (they have employment, income and good credit).
In today’s article, the Treasury may overstep Congress to help make the expanded program that many have been hoping for a reality. From Bloomberg Businessweek:
Treasury may act unilaterally to aid borrowers who owe more than their homes are worth if Congress doesn’t pass legislation providing assistance, Stegman, a counselor on housing policy for the agency, said at an American Securitization Forum conference.
“Legislation would facilitate a refinance, whereas under our existing authority, Treasury could only modify the most deeply underwater loans and pay investors for some amount of forgone interest,” Stegman said.
A petition to remove the securitization date with HARP 2.0 is making it’s way through social media. Currently, in order for a mortgage to qualify for a Home Affordable Refinance (HARP 2.0), the mortgage needs to have been securitized by Fannie Mae or Freddie Mac prior to June 1, 2009. Securitization has nothing to do with when a loan closed and it often takes place weeks or sometimes months after closing.
Many home owners have felt burned by this cut-off date as they have no control over when Fannie or Freddie securitized their loan yet they’re being punished by not being allowed to use this program to refinance.
The petition is also asking the home owners who have already refinanced using the HARP program, to be allowed to “re-HARP” or refinance again under the HARP program.
Congress and the Obama Administration has been discussing the possibility of changing guidelines to the Home Affordable Refinance Program, including removing or extending the securitization date among other things. The revamped program, which may also be open to loans not securitized by Fannie or Freddie, has been referred to HARP 3.0 or #MyRefi.
The petition was created last week is trying to reach 25,000 signatures by February 8, 2013.
Under the Home Affordable Refinance Program (HARP) The Director of The Federal Housing Finance Agency has authority to extend or eliminate the eligibility cutoff date. Currently the date is set as 5/31/09. Many responsible home owners are unable to take advantage of the program to reduce their mortgage rates because of this date. On 3/17/12 HARP was revamped (HARP 2.0) and home owners were given the power to shop for the best rates. However, those who previously refinanced under the original program are not eligible because of the the arbitrary cut off date and 1 time use limit set by FHFA Director Edward DeMarco. Eliminating the cutoff date and allowing home owners a 2nd chance to refinance under HARP 2.0 would help millions of Americans to save money on their monthly mortgage payment.