President Obama calls on Congress to expand HARP to ALL homeowners.
In his June 1, 2013 weekly address to Americans posted to the White House Youtube channel the president made the following assertions about the US economy.
- Businesses have created nearly 7 million new jobs over the past 38 months.
- An auto industry that was flat lining is once again the heartbeat of American manufacturing – with Americans buying more cars than we have in five years.
- Within the next few months, we’re projected to begin producing more of our own crude oil at home than we buy from other countries – the first time that’s happened in 16 years.
- Deficits that were growing for years are now shrinking at the fastest rate in decades. The rise of health care costs is slowing, too.
- And a housing market that was in tatters is showing new signs of real strength. Sales are rising. Foreclosures are declining.
- Construction is expanding. And home prices that are rising at the fastest rate in nearly seven years are helping a lot of families breathe a lot easier.
Regardless if you believed the president or not, or if the president should be entitled to take credit for what he claimed as successes, one thing that caught this mortgage loan officers attention was what he urged congress to do during the abbreviated Summer session.
President Urges Congress to pass HARP 30.0
Obama called on Congress to “pass a law giving every responsible homeowner the chance to save about $3,000 a year on their mortgage by refinancing at historically low interest rates”. Exactly what such a law would look like is anyone’s guess but I have to imagine that it would not be good for the housing sector or real estate prices because Making Home Affordable otherwise known in the industry as HARP 2.0 already provides little barrier to entry. Furthermore, if what the president and media outlets are asserting is true, specifically that real estate prices are in fact on the rise at the fastest pace in more than half a decade, then the markets should take care of the problem facing anyone that expansion of HARP would potentially eliminate.
You may be eligible for HARP if you meet all of the following criteria:
- The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
- The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
- The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
- The current loan-to-value (LTV) ratio must be greater than 80%.
- The borrower must be current on the mortgage at the time of the refinance, with a good payment history in the past 12 months.
If your loan is owned by Freddie Mac, you may check your potential eligibility for HARP here.
If your loan is owned by Fannie Mae, you may check your potential eligibility for HARP here.
*Eligibility criteria are for guidance only. Contact your mortgage servicer to see if you are eligible for HARP.
President Obama Urges Congress to expand HARP to ALL Homeowners
One possible enhancement to HARP known as HARP 3.0
One possible enhancement to HARP known as HARP 3.0 is pushing forward the eligibility date from May 31, 2009 to 2010. Some experts suggest that there are between 27 and 43 billion dollars’ worth of unpaid principal loan balances that could benefit from such a move. However, because both Fannie Mae and Freddie Mac have been in receivership by the federal government since 2009 (essentially they are bankrupt} , such a move would require an act of congress to modify their charters to allow for loans with loan-to-value ratios greater than 80%.
Whether or not this is a good thing, only time will tell. However, in light of the recent spikes in mortgage interest rates, such a proposal may be too little too late. Unless the Ben Bernanke and his 12 cohorts at the Federal Reserve want to kick the printing press into warp drive in order to buy more mortgage backed securities the market place may eliminate any benefit these homeowners would have recognized due to rising mortgage interest rates.
Ricardo Cobos is a licensed mortgage loan officer in Raleigh-Cary-Durham North Carolina who has been helping families achieve financial security through responsible home-ownership since 1998. (919) 526-0183
- President Obama Urges Congress to expand HARP to ALL Homeowners (theraleighmortgageguy.com)
- HARP 2.0 Continues to Succeed Where 1.0 Fell Short (mortgagenewsdaily.com)
- More Evidence That HARP 2.0 Revisions Revitalized The Program (mortgagenewsdaily.com)