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HARP program extended in hopes of reaching more home owners

By: 29 October 2011 4 Comments

On. Oct. 24, the Federal Housing Finance Agency, Fannie Mae and Freddie Mac announced changes to the Home Affordable Refinance Program (HARP) designed to reach more borrowers in trouble with their mortgages.

HARP is over two-years-old now and hasn’t been the lifesaver people hoped. According to Fannie Mae and Freddie Mac, the government sponsored enterprises have modified mortgages for about 9 million Americans over the past couple of years and around 10 percent – less than 1 million – people have gotten more affordable loans through HARP.

Apparently, the solution to the under-performing HARP is to expand it so that more people can take advantage of it. The main changes here involve making the program more affordable and available to more people who are underwater on their loans. A good number of the fees and costs to both borrowers and lenders seeking relief under the program have been waived, thus making the out-of-pocket costs to people wanting to refinance considerably lower.

Also, the old requirement that borrowers must owe no more than 125 percent of the fair market values of their homes is waived – good news for those living in homes that have dropped in value over the past few years.

In short, the changes require less money from borrowers, waive certain fees to banks and open the door to borrowers to refinance their loans regardless of how much they owe on their homes. The announcement came at a time when mortgage rates are near record lows, meaning the program could help a lot of Americans if it is run well enough. By the way, the national Mortgage Bankers Association estimates that mortgage interest rates will remain low through 2012 – qualified borrowers may receive assistance through HARP for some time.

So much for the revisions. What requirements of HARP stay in place? Those include:

• Borrowers must have a mortgage guaranteed by Fannie Mae or Freddie Mac. Since those two enterprises back the majority of mortgages in the nation, that requirement isn’t as daunting as it may seem at first.

• Borrowers must be current on their mortgages.

• The borrower must be able to reasonably afford to pay the new mortgage amount and the new loan must improve the longterm affordability or stability of the mortgage.

Bear in mind that the exact time the newly expanded HARP program is available isn’t exactly clear as of yet. The Mortgage Bankers Association pointed out that it will take some time for the new requirements and guidelines to be sent on to lenders.

Still, the announcement of the newly expanded program does appear to be a step in the right direction and it is something that lenders have been asking for over the past few months. It’s worth mentioning that HARP is geared toward people who are current on their mortgages – a group that has been somewhat overlooked when it comes to helping people who are struggling with their loan payments. Perhaps the expanded HARP will offer more assistance to that group.

Home Sweet Home is written by Ethan C. Nobles and is sent weekly to publications throughout the Natural State on behalf of the Mortgage Bankers Association of Arkansas.

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


  • Shah said:

    Will this work for people who have mortgages with Bank of America with LPMI?

  • Ethan C. Nobles (author) said:

    Shah — hard to say, exactly. I’m not sure it matters who pays for your mortgage insurance, and that point becomes moot if you have enough equity in your home to get past the “80 percent” mark.

    The first thing to consider when determining eligibility is whether your mortgage is backed by Fannie Mae or Freddie Mac. The chances are good that it is, but you really need to visit with Bank of America about that.

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