About Government Refinance and Home Purchase Programs

Information and Updates on Government Mortgage Programs
Filed under HARP Program Loans or The Obama Refinance Program

Widely anticipated changes to the Home Affordable Refinance Program (HARP) were announced this morning. The updates include several but not all of the changes most borrowers have been hoping for. Among the changes are the following:

1. There is no longer a 125% loan to value limit to the program. Going forward HARP loans can theoretically work for any loan backed by Fannie Mae or Freddie Mac regardless of how underwater the home is.

2. A full appraisal will not be required in all cases. Reports are that in some cases an automatic valuation system may be used.

3. Mortgage insurance providers have reportedly agreed to automatically transfer mortgage insurance coverage to the new loan. If this is true it will be a huge change because previously borrowers with mortgage insurance were not able to participate in the HARP program.

Unfortunately, the cut off dates for eligibility were not changed so any loans taken out after May of 2009 are still not eligible for the program.

The FHFA said the operational details for the program will be available by November 15th 2011. That probably means that the new program won’t be up and running with most authorized lenders until December. The question yet to be answered is how many authorized lenders will choose to participate in the new version of the program in the months to come. But assuming several authorized lenders do participate there is no denying that removing the 125% limit and the allowing borrowers with mortgage insurance to participate will open the program to vastly more borrowers.

Contact us in the sidebar to learn more about the HARP program and other government-backed refinance programs that are available.

Comments (6) Posted by G.R.A. Admin on Monday, October 24th, 2011

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