December 10, 2012 by Raj Qsar
HARP 3.0 | Underwater on Your Home? | What’s New in 2013
2013 is fast approaching – the election is behind us – and the housing market is looking to break out, but, there is still help needed for our current homeowners moving into 2013. Many homeowners are still underwater and unable to capitalize on low interest rates. This is why congress, on its published it’s “To-Do List” , moved the refinance topic into the #2 slot. Obama’s “To-Do List” . Obama realizes there is a lot of work to be done in turning around this market for the majority of Americans. The main issue the president is dealing with are those non- Fannie/Freddie and FHA loans that fall outside the current HARP guidelines.
The current administration has put into place some fabulous programs to help current and document providing homeowners refinance their mortgages; HARP and HARP 2 along with the FHA streamline refinance program. The Harp 2 success numbers are starting to build with the second round of adjustments made to the programs. HARP 2 numbers . The reducing/capping of lender add on fees (Loan Level Price Adjustments or LLPA’s), increasing the Loan-to-value (LTV) limits, including working with PMI companies, and streamlining the LP & DU underwriting systems with Fannie and Freddie, have opened the HARP program to more homeowners. Despite all of that success, there is still plenty of room for improvement. The big one is – What to do with all of the Non- Fannie & Freddie loans that currently don’t qualify for the HARP 2 program? Those are the sub-prime loans of the 2000 – 2007 time frames, the Alt-A loans, and the Jumbo loans (loans above 417k at the time ). There are plenty of willing and able borrowers who can be helped by HARP 3. If HARP 3 were to be passed, it could fill the gap for those borrowers – and this program is picking up stream in this administration. Keep in mind this so called “HARP 3 “ program started during the Obama State of the Union address. HARP 2 and HARP 3 information .
Given the track record of how the current administration has worked with federal mortgage refinance programs, I see a very good chance this bill moving forward in congress. I think it’s safe to say both sides agree that the key to recovery is jobs and housing.
Here is an example of what it could look like . What HARP 3 could look like very soon
The million dollar question is – Will it pass, and when will it pass? Given the amount of attention, the prior success HARP 2 had over the original HARP, and the amount of homeowners still left to save, I predict it happens in Q1 and right after the Debt Ceiling/ Fiscal Cliff shenanigans are over.
Special Thanks to Scott Nicholson of PrimeLending for putting this post together and allowing us to share it.