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Harp 2.0 Revised?
Well not exactly.... What I mean is that as rates rise Lenders are looking for ways to keep their pipelines full with loans, so how do they achieve this? Remove the overlay. At face value the HARP Program is a great program for responsible homeowners who have been paying their mortgages on time but cannot refinance their loan in most cases because their home is “underwater” this loan would allow those homeowners to refinance their underwater homes allowing them to take advantage of the historically low rates.
Sounds easy enough right well it depends on who you speak to. When the program came out in its raw form Lenders instituted overlays to the product which essentially is another set of guidelines if you will that they follow in order to underwrite and approve a loan. Example when HARP came out the credit requirement was a 580 score Lenders thought that was a bit low so they added an overlay that said they would not approve a HARP loan with a credit score under a 640 that is an over lay.
So in short the program was overlaid to death and was not able to help as many people as the program was intended ... more
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