HARP UDATED GUIDELINES. THE GOVERNMENT IS FINALLY GETTING IT RIGHT!!

Re: HARP
Hi all,
I have been keeping my eye on the recently updated HARP guidelines. Thursday FNMA reported it was rescinding the "ability to repay" overlay from the new lenders responsibility on HARP. This added to the removal of the LTV appraisal requirement and is potentially allowing a refinance for distressed borrowers very easy. The reasoning is if the borrower is current on their (higher interest rate) existing loan on an over encumbered property for at least the last 12 months, they can refinance to a lower rate and payment. Reason says the borrower respects being current and should stay current at a lower rate. GSE's will keep the responsibility for the loan and this takes the burden and risk off the refinance lenders that have to follow the new SAFE Act and Dodd Frank laws. How ironic!!

I would like to add to this very good news another scenario that may play it's self out. I would like to see existing lenders with HELOCs and seconds allow their existing loans to be subordinated to these new firsts. This will go a long way to helping borrowers lower their monthly payment outlays and give current homeowners that have not strategically defaulted the reward and relief they have been waiting for and deserve.
http://www.dsnews.com/articles/fannie-mae-removes-ability-to-repay-criteria-from-harp-20-guidelines-2011-12-22

respectfully,
Terry Lewis
COO Note Builders Inc.
DRE Broker #00686433
NMLSR #718-005