HARP 3.0 Update

 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).

From the Press Release:

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.