The Home Affordable Refinance Program failed to reach millions of underwater homeowners needing lower mortgage payments. HARP 2.0 is set to expire at the end of 2013 but the good news is that there are new talks in Washington about extending and expanding the program. Here’s the latest HARP 3.0 news to help you take advantage of today’s low refinance rates with your underwater mortgage.
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Home Affordable Refinance Program Extension Eminent
Extending and expanding the Home Affordable Refinance Program (HARP 3.0) was a topic of discussion at a recent conference of the American Securitization Forum. Michael Stegman of the U.S. Treasury told conferences goers that President Obama is working to include privately held, non-Fannie Mae or Freddie Mac home loans in the government refinance program.
Privately held mortgage loans, meaning someone like Wells Fargo or Bank of America holds the mortgage instead of Fannie Mae or Freddie Mac, are the reason that millions of underwater homeowners cannot qualify under HARP 2.0. Government statistics indicate that these mortgages are responsible for nearly 2/3rd of mortgage delinquencies, a growing problem for the entire housing market.
President Obama is working with Congressional leaders on a bill but the President doesn’t necessarily need their approval to move forward as the Treasury Department already has the authority to modify many of these privately held mortgage loans, compensating investors for their losses in the process.
New HARP 3.0 Changes Promised
California Senator Barbara Boxer and Robert Mendez of New Jersey are promising (again) to sponsor new legislation in the coming weeks with similar goals for protecting lenders from losses and allowing homeowners previously left in the cold to qualify.
Along with that bit of seemingly positive news, New Jersey Senator Robert Menendez and California Senator Barbara Boxer plan to introduce new legislation this week aimed at protecting lenders from losses on refinancing privately-held underwater mortgage loans. The proposed changes would also extend HARP 3.0 for another twelve months.
There are several encouraging points to this Home Affordable Refinance Program legislation of interest to those not eligible for HARP 2.0:
- Incentives to Increase Lender Participation
- Allow For Non Fannie Mae and Freddie Mac Mortgage Loans
- Eliminate The Cutoff Date of May 31st, 2009
- Extend HARP 3.0 by Another Year
This is the kind of encouraging HARP 3.0 news underwater homeowners have been waiting for and would benefit the government by reducing delinquencies and foreclosures.
The new bill is the latest in a long list of proposed legislation, the most recent fell by the wayside as part of the fiscal cliff negotiations. Last year also saw the proposed Rebuilding American Homeownership stall and ultimately fail in Congress.
Will This HARP 3.0 Proposal be Different?
If there’s one constant in Washington it’s that Democrats and Republicans can’t agree to disagree. The longer they delay updating HARP 3.0 the more underwater mortgage holders walk away from their homes. The more Congress bickers over changes to the Home Affordable Refinance Program the less chance a bill has of reaching President Obama’s desk.
If you’d like to get involved and help HARP 3.0 become a reality sign the petition on the White House’s website.
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