The Home
Affordable Refinance Program (HARP) has been extended for another year
according to information released on Friday from the Federal Housing Finance
Agency.
The program was due to expire on
June 30 but will now continue until that date in 2012. News of
the extension comes while a House subcommittee is debating the end of HARPs
companion program, the Home Affordable Modification Program (HAMP) and has
already voted to kill the FHA Short-Refi program and the new Emergency
Assistance Loan Program (EALP) which would provide 23 months of mortgage
assistance unemployed and underemployed home owners.
HARP is
designed to assist homeowners who owe more money on their current mortgage that
the market value of their home and are thus unable to qualify for a
conventional refinance. Refinancing through
HARP, which is administered by the Enterprises Freddie Mac and Fannie Mae, can
potentially reduce homeowners' mortgage rates and remove some of the incentives
for a strategic default.
Acting
FHFA Director Edward J. DeMarco that that the program will continue operating
in the same manner as it has since in was started in 2009 except that Freddie
Mac will exempt HARP loans from their recently announced price adjustment and
Fannie Mae will conform the eligibility date to May 2009.
The use
of HARP more than tripled in 2010.
During the year a total of 6.8 million mortgages were refinanced
nationwide and HARP, with 621,803 loan closings, represented nearly 10 percent
of the total. In 2009 190,180 homeowners
used the program to refinance.
To qualify for HARP you must currently have a mortgage owned or
guaranteed by the Enterprises, have a one year history of on-time payments on
your loan, and owe more on your loan than your home is worth. The loan-to-value, however, cannot exceed
125%.
UPDATED WITH INFO RELEASED BY FANNIE MAE...
The following changes will extend the availability of the program to additional borrowers:
- The program has been extended. Accordingly, lenders may continue to originate Refi Plus™ and DU Refi Plus™ loans with the HARP flexibilities provided the note date is on or before June 30, 2012, and whole loans are purchased by Fannie Mae no later than October 31, 2012 or in an MBS pool with an issue date no later than October 1, 2012.
- Currently, to be eligible for Refi Plus or DU Refi Plus the existing mortgage loan being refinanced had to be purchased by Fannie Mae prior to March 1, 2009 or in an MBS pool with an issue date prior to March 1, 2009. With these program changes, mortgage loans are now eligible if they were purchased by Fannie Mae prior to June 1, 2009 or in an MBS pool with an issue date prior to June 1, 2009.
Desktop Underwriter® (DU®) and the delivery system edits will be updated to reflect the additional mortgage loans that are now eligible for inclusion in the program (loans purchased or securitized by Fannie Mae between March 1, 2009 and June 1, 2009). Consequently, DU will not identify these loan casefiles as eligible to be refinanced using DU Refi Plus until April 11, 2011, and DU and manually underwritten loans meeting the new eligibility requirement can be delivered to Fannie Mae on or after April 11, 2011.