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The Responsible Homeowner Refinancing Act Is Back

Last year’s version of the Responsible Homeowners Refinancing Act met a quick death in Congress. During the President’s State of The Union Address he called for Congress to pass a new bill that would save you $3,000 a year refinancing your home. Here’s the latest HARP 3.0 news and what you can expect from Barbara Boxer’s attempt to get this bill through the wasteland that is Washington.

HARP 3.0 Is Coming… More or Less

The President called out Congress on their inability to pass the bill questioning why anyone would be against this or turn it into a partisan issue. This year’s version of the bill the President is talking about is the Responsible Homeowner Refinancing Act, S. 249 of 2013. The bill is being sponsored (again) by Barbara Boxer (Democrat from California) and Robert Mendez (Democrat from New Jersey).

Is this bill the much anticipated HARP 3.0 that is supposed to remove the Fannie Mae or Freddie Mac requirement leaving millions of homeowners out in the cold?

Sadly, it is not.

While this bill extends the Home Affordable Refinance Program another year it still requires that Fannie Mae or Freddie Mac backed your mortgage prior to June 1st, 2009.

There are some changes to this year’s version of the Responsible Homeowner Refinancing Act worth noting.

  • Includes Incentives to Encourage Competition Between HARP Lenders
  • Allows Streamline Refinance for Government Insured Loans Regardless of LTV
  • Reduce Up-front Fees & Eliminate Appraisal Fees
  • Remove Income & Employment Verification Requirements
  • Extend HARP 3.0 for One Year

This bill is very similar to last year’s attempt with the exception of reducing up-front fees instead of eliminating them. The new legislation removes several provisions credited for killing the old bill, namely imposing fines on insurers and second mortgage holders trying to prevent refinancing.

Last year’s bill moved the eligibility date to 5/31/2010, which by itself would have allowed many to qualify; however, this provision was removed from the current bill.

Changing the eligibility date was a step in the right direction if not removing the Fannie/Freddie requirement.

The petition on the Whitehouse website calling for the removal of this date and allow re-HARPing failed to get the signatures necessary to get the Whitehouse’s attention.

Will HARP 3.0 Pass Anytime Soon?

The odds of this bill passing the House and Senate and finding its way to President Obama’s desk are pretty slim. Gun control and immigration reform are the hot topics in Washington this year. The Home Affordable Refinance Program won’t be allowed to expire and will probably get a few tweaks, most likely by Executive Order of the President.

What’s an Underwater Homeowner to Do?

If you’re unable to qualify for the Home Affordable Refinance Program because of the Fannie/Freddie requirement and are underwater in your home your options are limited to cash-in refinancing at this time.

Cash-in refinancing means you’re bring enough cash to the closing table to get your LTV right-side up. For many homeowners this is simply not a practical option. HARP 3.0 appears to have the deck stacked against it and the millions of underwater homeowners that need its help the most.

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