The Home Affordable Program, HARP, has been extended until December 2015. I am very pleased for two reasons; first, the program has helped us tangibly weather the last financial crisis, and if the program were to close at the end of 2013 efforts to assuage the effects of the downturn may be trampled. The second reason this pleases me, is that the continued supply of this product, which is in high demand, may help those looking to open a mortgage branch hit the pavement running.
What I mean by “hit the pavement running” is that the large percentage of underwater mortgage holders may represent a steady stream of applications while a newly opened mortgage branch establishes itself.
HARP was introduced by the Department of the Treasury in early 2009 to help reduce the risk and rate of mortgage defaults due to declining home prices and the decreased ability of many mortgage holders to refinance their debt. The program was originally scheduled to end in December of 2013, but last April, the Federal Housing Finance Agency announced the extension of the program due to the successful decreased in mortgage defaults and increasing demand from underwater mortgage holders. The life of the program has been extended to December, 2015.1
This graph was published by the Federal Housing Finance Agency in its Foreclosure Prevention Report, January 20132
The program is in high demand because in 2009, many borrowers saw themselves underwater. As we know along with the downturn came smaller incomes, and a lot of borrowers began to struggle with mortgage payments. Furthermore, the shrinking mortgages' loan-to-value, LTV, ratios made it impossible for borrowers to refinance the debt. Thanks to the large percentage of the mortgages, Fannie Mae, Freddie Mac, and the government are eager to help refinance these likely “inverse” collaterals to lenders who have done their best to keep up with payments. In an effort to broaden the scope of coverage, HARP was extended into Refi Plus and DUI Refi Plus3. These program mutations relaxed the LTV of mortgages and other qualifying variables with the aim to cover more borrowers. Original HARP limited qualifying mortgages to those owned/guaranteed by the GSEs before the end of 2009; now the cut-off date is 2014, and even mortgages that have not been acquired/guaranteed may qualify for these programs. So whether a borrower was in shambles in 2009 or is about to get in, HARP, in one form or another is here to the rescue. Borrowers will continue to seek help accessing this program.
For those looking to open a mortgage branch, processing these refinancings is an easy job (i.e. large number of qualified potential borrowers, and a very clear cut program). However, to really get on to a good start, the operator must look for mortgage branch opportunities that truly help its LOs supply HARP. Many lenders are capping HARP’s Refi Plus and DUI Refi, thus limiting the number of borrowers who would otherwise qualify for the program and the number of applications that the LO may have processed. A real opportunity, is one in which the lender qualifies borrowers according to the guidelines established by the FHFA and not according to the lender’s discretion.
We are a mortgage company that wants our partners to succeed. This is why we offer HARP’s Refi Plus and DUI Refi with no caps, and we qualify borrowers according to the programs' guidelines.
As the Mortgage Branch Leader we want to partner with seasoned mortgage professionals who want to open a mortgage branch. Our mortgage branch opportunities are a better alternative to the net branch opportunities out there. As a branch partner, and contrary to a mortgage net branch, working with a direct agent, full eagle lender, you’ll get competitive pricing, full product portfolio, and other benefits. Best of all, we are team oriented company who recognizes that your success is a requirement for the sustainability of our business. Please visit our website to learn more