The Home Affordable Refinance Program (HARP) was exanded on Monday. New guidelines were promised that should allow more people to refinance.
I'm encouraged by the details of HARP II. The changes will allow more homeowners to refinance. However, until final details are disseminated by FNMA & FHMLC, it's impossible to know if all segmenst of the mortgage origination channel will have access to the changes.
Many of my colleagues are expressing doubts that they will be able to participate in originating these loans. When the original HARP program was announced, many features within the program were only available to the current servicer of the loan.
This left third party mortgage originators excluded from originating to the same standard as the current servicer. It's easy to understand why the numbers of homeowners taking advantage of the HARP program to date have been low.
Of primary interest to us will be the changes around mortgage insurance. Until now, borrowers with mortgage insurance (loans typically over 80% LTV) have been unable to take advantage of current low interest rates. The changes announced yesterday purport to address these issues.
We currently have two separate transactions on-hold as a result of low appraisals. One in particular has been in the same home for 15+ years and has a monthly household income of less than $3,500. For them, having a solution on the horizon will be welcome news.
The bottom line is that these changes mean more loans for people that currently can't get one. Before we get too excited, we'll have to wait and see how the changes are implemented and how much of the industry is given access to these loans. Until thne, it's difficult to speculate on the overall success or effectiveness of this announcement.
As always, if you have any questions or need anything, give us a call at 970.455.4131. ~ Regards, JB