HARP 3.0 May Now Move Forward In Parts Instead of Sweeping Changes

Mortgage experts recently met with White House officials to discuss housing and mortgage issues, resurfacing the possible idea of establishing a Home Affordable Refinance Program 3.0 (HARP 3.0 program). Particularly, the Obama Administration is intending to push for a HARP 3.0 program, allowing private-label loans (non-Fannie or non-Freddie owned) to be refinanced through Fannie Mae and Freddie Mac, according to analysts at Compass Point Research & Trading.  These loans are often called “portfolio” loans because they are retained in the actual lending portfolio of the originating bank and not sold to Fannie Mae or Freddie Mac – either by design on good yields or because they were niche loans that did not meet Fannie Mae and Freddie Mac underwriting standards for a variety of reasons.  These folks have had little help under HARP 2.0 but currently we can help some with our direct lender short refinance program.  If your loan is not backed by Fannie Mae or Freddie Mac there still may relief for you with or without HARP 3.0.  See if you qualify HERE.

HARP LOAN PROGRAMWhile it remains to be seen if such a structure will develop, the administration is currently in talks about changing the eligibility date for HARP refinances. However, economists firmly believes two distinctive issues are at hand. “While observers should remain cognizant of the potential for a focused public relations push to expand the HARP in the near future, we remain skeptical that the White House will spend the political capital necessary to accomplish either the creation of a non-agency refinancing vehicle or a change to the HARP eligibility date,” said Isaac Boltansky, Kevin Barker and Jason Stewart of Compass Point. Additionally, while the White House could likely support efforts to expand HARP in numerous ways, the support will be driven by political pretense rather than policy urgencies. “We believe the observers expecting a different end to this most recent iteration of mortgage policy’s Groundhog Day will be sorely disappointed,” Compass Point noted. In comparison, Sarah Hu, chartered financial analyst of Royal Bank of Scotland stated that while HARP 3.0 has been talked about in the market for quite some time, it has not gained much traction. “Currently, HARP is only limited to borrowers with loans guaranteed by Fannie Mae and Freddie Mac as the government-sponsored enterprises already own their risk. To some extent, HARP has become the loss mitigation tools for the GSEs,” she said. As a result of congressional approval and resistance, extending HARP to include private-label loans does not seem near to reality at this point, Hu explained.  The clear fact remains that either moving the HARP eligibility date back by one year or removing the possibility of changing the date completely would be a possible HARP 3.0 scenario. “If the HARP eligibility date were to be pushed back by one year to May 2010, we estimate that between $27 billion and $43 billion in unpaid principal balance of mortgage debt could be re-HARPed,” analysts explained.

So it seems as you wade through all the industry talk, that they will most likely work to extend the HARP eligibility dates back to allow for additional HARP loans under a modified and streamlined HARP 3.0 program.   This will help some, but not all.  Not sure where you stand?  Not all HARP Lenders are the created equal.  Take advantage of our years of HARP expertise – start the conversation by clicking above.