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Home » Business, News, Real Estate

Mortgage Bankers ask for HARP extension

By: 27 February 2011 10 Comments

The Home Affordable Refinance Program (HARP) is set to expire at the end of June and the national Mortgage Bankers Association has asked the Federal Housing Finance Agency (FHFA) to extend it until the end of 2012.

What is HARP? Simply put, it allows home owners who are current on their mortgages – but worried about falling behind on them – to refinance their loans and bring down their house payments. HARP is not to be confused with the Home Affordable Modification Program (HAMP), which is designed for home owners who are either in default on their mortgages or rapidly approaching the point where they will be.

Those home owners wanting to apply for assistance through the federal government’s HARP program need to have loans backed by Fannie Mae or Freddie Mac – the government-sponsored enterprises that underwrite the lion’s share of home loans in the nation – and must demonstrate legitimate hardships. How does a home owner know if he or she qualifies for HARP assistance? That requires either a lot of research or a visit with a mortgage lending officer who should be able to help the home owner find the answer to that question.

What do qualified home owners get under HARP? Simply put, a lower interest rate than the ones under which they originally financed, lower monthly payments and – of course – the peace of mind that comes with a lighter financial burden.

The goal of HARP, naturally, is to cut down on the numbers of foreclosures that have plagued the nation since 2007. The Mortgage Bankers Association contends that a lot of home owners are still having trouble making ends meet and are in need of a little help.

Unfortunately, HARP has only been moderately successful and the Mortgage Bankers Association attributes that to a number of factors. For one thing, both Fannie Mae and Freddie Mac have different versions of the HARP program with different requirements, thus prompting the Mortgage Bankers Association to call on both agencies to come up with a uniform set of guidelines.

Furthermore, both programs cap the loan-to-value ratio for borrowers at 125 percent, meaning that some of the most deserving borrowers can’t get any help through HARP. We’re talking about home owners who are current on their payments but are too severely underwater in their loans to get any help through the program. Those are the people who could fall through the cracks – they can’t get assistance, but are in the most danger of going into foreclosure should they fall behind on their payments.

The economy is still in recovery mode and, not surprisingly, there are a lot of home owners struggling to make ends meet. We’ve already seen how foreclosures hurt home values and threaten to put a lot of home owners out of their houses, and HARP is simply a way to offer a little assistance to people who have paid their mortgages but are going through a rough time.

Hopefully, then, HARP will be extended and improved to give some borrowers some much needed help during these trying times.

Column written by Ethan C. Nobles and distributed to Arkansas publications on behalf of the Mortgage Bankers Association of Arkansas.

About: Ethan C. Nobles:
Benton resident. Rogue journalist. Recovering attorney. Email =


  • Jon Berry said:

    HARP refinance is a great program. The biggest thing limiting it’s effectiveness is the mortgage banks and lenders themselves though. 95% of them won’t do the program to it’s maximum LTV of 125%. They will only go to 105%. HARP refinance has been more effective then virtually all of the other government initiatives to combat the foreclosure crisis. Sadly however, it’s another well intentioned program that the banks have no interest in or obligation to fully implement.

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