The Responsible Homeowner Refinancing Act Is Back

money dollars cash burden debt chain 600x450 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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Encouraging HARP 3.0 News

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.

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.

Click Here For More Details…

You can learn more about paying less for your next home loan by avoiding lender junk fees and points by checking out my free Underground Mortgage Videos.

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HARP 3.0 Is Dead, Long Live The Home Affordable Refinance Program

Yup, I said it, HARP 3.0 is dead. It was never more than a rumor but HARP 3.0 gave hope to millions of non-government insured, underwater homeowners. Don’t get me wrong, HARP 2.0 is the best thing to happen to homeownership since the VA mortgage loan, but it left millions of deserving people out in the cold. When President Obama removed the 125% loan-to-value cap the Home Affordable Refinance Program lived up to its potential…almost. Here’s the latest HARP 3.0 news and something you can do today to help bring HARP 3.0 back from the brink.

HARP 3.0 Was Supposed To Happen But…

Turn on the TV and the news is filled with fallout from the fiscal cliff deal and gun control. Talk of HARP 2.0 is a distant memory from 2012. The program, which helps underwater homeowners refinance home loans that were until recently too toxic for lenders, is the last thing on anyone’s mind in Washington.

Who is the Home Affordable Refinance Program for?

As I mentioned, the biggest letdown of HARP 2.0 was that it did nothing to remove the requirement that your home loan be backed by Fannie Mae or Freddie Mac prior June 1st, 2009. If your home loan isn’t backed by the government and is privately held by someone like Wells Fargo or Bank of America you’re out of luck.

If President Obama and Congress remove the government insured mortgage requirement with HARP 3.0 it would help millions of deserving, financially responsible homeowners.

Here’s a list of groups of homeowners that stand to benefit from HARP 3.0:

  • Self-employed Homeowners
  • If you’re self-employed and can verify your income with tax returns and bank statements but can’t qualify for refinancing because of your loan-to-value ratio HARP 3.0 could help you.

  • Homeowners With Bad Credit Mortgage Loans
  • If you’re underwater in a sub-prime mortgage the deck has really been stacked against you. Changes to this government refinance program offer a glimmer of hope but have yet to materialize.

  • Jumbo Mortgage Holders
  • Much like underwater sub-prime mortgage holders, there’s not much more toxic to lenders than an underwater jumbo mortgage loan.

  • Stated-Income Mortgage Loans
  • If you purchased your home with a stated-income home loan and cannot qualify for refinancing based on verified income HARP 3.0 could help.

There are millions of underwater homeowners in the U.S. left out in the cold with the original government refinance program and HARP 2.0 that stand to benefit from a newly revised Home Affordable Refinance Program.

Wait, I thought you said HARP 3.0 was dead?

Any proposal in Washington that isn’t getting lawmaker attention is dead, so to speak. With gun control on the forefront of the Whitehouse’s agenda there’s little hope for HARP 3.0 coming anytime soon. Also, HARP is set to expire at the end of this year unless extended by the President or Congress.

I realize this isn’t the news you were hoping for but there are things you can do to help yourself in the absence of a revised Home Affordable Refinance Program.

Keep calm and carry on…

What’s an underwater homeowner to do? First of all, keep making those mortgage payments on time.

In fact, make all of your payments on time including those credit cards. Spend some time reviewing your credit reports for errors. You can get free copies of all three of your credit files by visiting the government-mandated website AnnualCreditReport.com. If you find mistakes all three credit bureaus (Equifax, TransUnion and Experien) process online disputes. Dispute all inaccurate or outdated information you find in your credit reports.

Finally, maintain the highest possible credit score by keeping the balances on your credit cards below 30% of your limit. This is doubly important for any store charge accounts.

You can help resurrect HARP 3.0

There’s a petition circulating social media today calling for President Obama to formally extend the Home Affordable Refinance Program and allow reHARPING. This could go along way to getting HARP 3.0 back on the minds of lawmakers in Washington.

You can find the petition on the WhiteHouse.gov website under “We the People…” using this link:

https://petitions.whitehouse.gov/petition/make-formal-request-fhfa-eliminate-securitization-cut-date-harp-eligibility-and-allow-re-harping/BlPYbvZw

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Underwater Mortgage? HARP Refinance Slashes Your Payment By 34%

The Home Affordable Refinance Program (HARP) was designed to help homeowners with underwater mortgage loans qualify for today’s best refinance rates. The program was just revised under HARP 2.0 to get more people qualified. If you were denied when the program first came out or have been putting off refinancing because you think you won’t qualify, HARP 2.0 could lower your payment by an average of 34%. Here’s what you need to know about qualifying for the government refinance program known as HARP 2.0.

HARP is for Underwater Homeowners Like You

Being underwater means you owe more for your mortgage loan than your home is worth. In the past having a loan to value ratio higher than 80% made it difficult, even impossible to qualify for mortgage refinancing. That’s where the Home Affordable Refinance Program comes in.

Much like the FHA streamline refinance or the VA’s Interest Rate Reduction Refinance Loan (IRRRL), HARP removes the requirement for home appraisal and income verification that come with traditional mortgage refinancing. By not requiring an appraisal HARP eliminates the loan to value requirements preventing millions of underwater mortgage holders from qualifying for mortgage refinancing.

This government refinance program also eliminates mortgage insurance for homeowners with less than 20 percent equity making HARP refinancing that much more attractive.

If you’re not paying for Private Mortgage Insurance (PMI) on your existing home loan you won’t be required to pick it up with your HARP refinance.

HARP Government Refinance Program Requirements

The problem with the original Home Affordable Refinance Program is that it was limited to loan to value ratios under 125%. The program was also plagued with lender overlays, lender specific rules limiting their participation in the program. These program overlays often required credit checks and appraisals which defeated the purpose of the program entirely.

President Obama revised the Home Affordable Refinance Program by executive order and HARP 2.0 was born. Gone is the 125% loan to value limit and there are new incentives to reduce risk for lenders and eliminate program overlays.

Here are the government refinance program requirements you need to meet to qualify for your HARP refinance:

  1. Fannie Mae or Freddie Mac must have acquired your mortgage prior to June 1st, 2009
  2. You must have made your last six payments on time and can only have one late payment out of your last 12
  3. Your loan to value ratio must be higher than 80 percent

No matter how far underwater you are in your existing home loan if you meet these requirements you can take advantage of today’s best refinance rates under HARP.

This isn’t to say that program overlays don’t exist with HARP 2.0, you’ll still find lenders playing by their own rules. If one lender denies your HARP 2.0 application and you’re willing to do a little legwork there’s a lender out there willing to approve you.

Beware Lender Fees on Your HARP Refinance

Just because you’re HARP refinance eligible doesn’t mean you don’t have to watch out for closing costs like the loan origination fee and discount points. In fact, part of the incentives included in HARP 2.0 to sweeten the deal for lenders is free reign to charge whatever they like for certain fees.

This is why refinance rate shopping with zero discount point quotes comparing interest rates and fees is so important. Pay close attention to and question the fees found in section 800 of your Good Faith Estimate. Common junk fees include processing fees, application fees and anything resembling a rate lock fee.

The less you pay closing on your HARP refinance the more benefit you’ll get from today’s best refinance rates. The reason fees are so important is that if you’re not able to break even recouping your out-of-pocket expenses because you paid unnecessary discount points or junk fees you’re going to be losing money no matter how low the interest rate.

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You can learn more about getting the best deal on your HARP refinance by avoiding lender junk fees and points by checking out my free Underground Mortgage Videos.

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Home Affordable Refinance Program (HARP 3.0) Coming In 2013

The Home Affordable Refinance Program (HARP) has helped millions of homeowners take advantage of today’s lowest refinance rates while leaving millions more out in the cold. With the election in full swing it’s doubtful that changes to HARP 2.0 will materialize before 2013. Here are several changes people are hoping the New Year will bring to this government refinance program with HARP 3.0.

Home Affordable Refinance Program Update Coming

HARP 2.0 will get a refresh before the existing program is set to expire at the end of 2013. As it exists today the Home Affordable Refinance Program has three basic requirements.

In order to be HARP 2.0 eligible you must meet the following requirements AND can qualify only once:

  1. Your mortgage must be owned by Fannie Mae or Freddie Mac
  2. The government must have backed your mortgage by 6/1/2009
  3. You must have paid your last six and 11 of the last 12 payments on time

These requirements might seem easy to meet; however, almost a third of underwater homeowners have privately held mortgage loans and don’t meet the Fannie Mae or Freddie Mac requirement. If your mortgage isn’t backed by Fannie or Freddie before June 1st, 2009 there is absolutely nothing you can do to qualify.

That’s where HARP 3.0 comes in. The best thing Congress and 2013’s elected President could do is eliminate the requirement that Fannie Mae and Freddie Mac own your mortgage. With millions of HARP 2.0 ineligible homeowners paying six percent or more on their home loans the potential savings is significant.

One of the ideas behind HARP is that by allowing millions of underwater homeowners to refinance with today’s best mortgage lenders it will reduce their payments freeing up cash to stimulate the economy.

Refinance Again Under HARP 3.0?

If you qualified for mortgage refinancing under HARP 1.0 you’re probably paying somewhere near 5% for your home loan. Mortgage refinance rates are in the neighborhood of 3.5% and access to the program again offers significant savings to around a million homeowners.

Unfortunately HARP 2.0 doesn’t allow for multiple mortgage refinancing. The program is limited to one time per household AND per property. If the Home Affordable Refinance Program’s goal is free up disposable income to stimulate the economy these two changes would accomplish just that.

June 1st 2009 Fannie Mae/Freddie Mac Requirement

If HARP 3.0 doesn’t remove the Fannie Mae, Freddie Mac requirement entirely it could remove the cut-off date. This requirement was intended to limit risk for lenders by requiring government backing but the cut-off date does little more than disqualify millions of homeowners.

Ideally HARP 3.0 would allow anyone to qualify for no cash back mortgage refinancing of their home at today’s lowest refinance rates. The program already limits risks and offers enough lender incentives that they have nothing to lose.

HARP 3.0 Fees Could Bite You

If you’re eligible under HARP 2.0 or could become eligible when the program changes in 2013 watch out for lender fees. Part of the incentives used to encourage lender participation is free range when it comes to certain fees.

The more you pay closing on your new home loan the less benefit you’re getting from the lowest refinance rates. Paying more at closing for things like the loan origination fee, processing fee, application fee and rate lock fee means it’s going to take longer to break even recouping your out-of-pocket expenses.

Click Here For More Details…

You can learn more about getting the best deal for your HARP 3.0 refinance without paying unnecessary lender fees or points by checking out my free Underground Mortgage Videos.

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