HARP REDUX?

By Daniel E. Cullick, CEO at Global American Title Agency, Inc

President Obama recently presented a proposal to revise the Home Affordable Refinance Program (HARP) … again.  This would be the third version of HARP and it is being proposed to help even more homeowners who have not been able to refinance because of the sharp drop in property values over the past several years.  While many borrowers have been able to take advantage of the previous versions, it has not been nearly as many as had been hoped.  The new version would have all the advantages of the previous versions, but would also:

            -   Eliminate the need for the borrower to have a Fannie Mae or Freddie Mac backed mortgage.  Under the new version, loans owned by banks and also loans with private investors would also be included.  (The program for these loans would be operated through FHA)

-  Make a credit score above 580 the qualifying mark.  About nine out of ten

borrowers would have the ability to meet this criteria.

            -  Set the maximum loan amounts at conforming FHA limits.  Depending on the area, FHA limits range from $271,050 to $729,750.

            -  Ensure the loan is for a single family owner-occupied principal residence.  The program is designed to help families stay in their homes.

            The proposal also includes caveats for eliminating the appraisal cost, streamlining the refinance process and increasing competition among lenders to insure the borrower is getting the best deal possible.

            A decision should be made in the near future.  Hopefully this will enable even more homeowners to take advantage of the record low interest rates.