The Home Affordable Refinance Program, commonly referred to as “HARP,” is an official program sponsored by the United States government. It’s managed by the Department of the Treasury and Department of Housing and Urban Development. HARP was initiated in 2009 in order to assist homeowners with underwater mortgages that are serviced by Fannie Mae and Freddie Mac. To date, the program has been highly successful in helping mortgage holders who are not behind on their mortgage payments with refinancing into mortgages that have better terms and are more affordable. This has provided very fortunate opportunities for approximately one million homeowners who have been able to take advantage of historically low mortgage interest rates.
Although HARP has been extremely beneficial for homeowners whose mortgages meet very specific criteria, a large number of homeowners who have high interest mortgages have not been able to benefit from HARP. Why? Because their loans are not serviced by Fannie Mae or Freddie Mac. This brings up an important concern. Why was HARP originally designed to assist only those homeowners who hold government-serviced mortgages? Is it because Fannie Mae and Freddie Mac are government-sponsored enterprises? If the goal of the United States government is to assist homeowners who are underwater on their mortgages, why is the original HARP program only available to Fannie Mae and Freddie Mac loan holders? This simply doesn’t seem fair. Homeowners unable to receive government assistance might want to coordinate with a mortgage broker from Denver to explore other alternative financial solutions.
Much to the potential advantage of non-Fannie Mae and Freddie Mac mortgage holders, HARP may be evolving. A proposed amendment to the new HARP program, which is currently being referred to as “HARP 3,” involves a plan intended to help all responsible homeowners refinance their mortgages – no matter who services their loans. And not only might HARP 3 help non-Fannie Mae and Freddie Mac mortgage holders, but the new plan may also be available to homeowners with mortgages considered “jumbo.” A jumbo loan is one that is larger than the limit set by the Office of Federal Housing Enterprise Oversight.
At this point in time, it is not known whether or not the HARP 3 plan will be approved. It’s also not completely clear what the specific details of the plan will be. But it’s likely that self-employed individuals, jumbo loan holders, sub-prime mortgage holders, and individuals whose credit scores have improved over the past few years will be excellent candidates for a HARP 3 refinance if the program ever passes.
In today’s world of home financing, there’s no telling whether HARP versus non-HARP interest rates will be better for those who want to refinance due to a variety of factors. While the HARP program was enacted originally to help responsible but underwater mortgage holders get out of their high-interest mortgages and into mortgages that are more affordable, it is currently intended to help only those who hold Fannie Mae and Freddie Mac serviced mortgages. Hopefully HARP 3 will eventually assist ALL underwater mortgage holders. Until then, homeowners should try their luck with a broker to settle a Denver home refinance plan. If you have any questions about refinancing (whether or not you qualify for HARP), be sure to give JM Reudy Lending a call today at (720) 389-6632.