According to The New York Times, the Obama administration’s revamped version of the Home Affordable Refinance Program (HARP) appears to be working. Almost double the number of underwater homeowners took advantage of the program in the first quarter of 2012, compared to the fourth quarter of 2011.
Previously, HARP, which launched in 2009 to help underwater homeowners refinance their mortgages with lower interest rates, had restrictions that limited the pool of potential applicants. The federal government initially limited the program to borrowers who owed between 80 and 105 percent of the value of their home; a few month into the program, they increased that limit to 125 percent. Even with the increase, fewer than 900,000 homeowners were participating in the program.
In October, the federal government eliminated the 125 percent limit, and homeowners finally started taking advantage of the program. According to the Times, 180,000 mortgages were refinanced in the first quarter of 2012, the highest number since the program started.
From the NYT:
“You’ll see an explosion in that above-125-L.T.V. [loan-to-value] category,” said Andrew BonSalle, a senior vice president of Fannie Mae and the head of its underwriting and pricing. Since the beginning of the year, 4,400 loans with L.T.V.’s greater than 125 percent were refinanced, according to the Federal Housing Finance Agency report. “There’s a lot of borrowers who don’t believe they’re eligible,” Mr. BonSalle said, adding that lenders need to keep reaching out to underwater homeowners so they know they can participate.
For homeowners who want to take advantage of HARP, there is still time. It will be in effect through 2013.
This article originally published at http://dc.urbanturf.com/articles/blog/revamped_harp_helping_more_homeowners/5693
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