The new Home Affordable Refinance Program (HARP) hasn't even kicked in fully and already there is an uproar over what is growing more controversial by the day. Here's the question. Is this really going to help homeowners or just cost the taxpayers more money?
HARP appears to be designed to help homeowners refinance their homes, even though their loan balance is higher than the home is worth. This is because there's no appraisal required.
It is clear that homeowners who are already in trouble won't be helped. If you have been late making your mortgage payment, or even worse you are currently behind and may soon face foreclosure, this program is not for you. You won't qualify.
So, instead of HARP helping the homeowner who is struggling, it's helping the ones who have the financial ability to make their payment. Put another way, if you have demonstrated that you don't need help you get it.
We are talking about loans held by Fannie Mae and Freddie Mac. When they failed, the federal government guaranteed their mortgages against default. Currently this is costing taxpayers billions of dollars each year.
Is HARP a windfall for responsible buyers? Sure. You can refinance from a higher rate to a lower rate, but that means less revenue to Fannie and Freddie. Guess who makes up the difference? The taxpayer.
Whether you like HARP or hate it will probably depend on whose ox is being gored.
What's your opinion? I'd like to know.
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