There has been some buzz on the internet in recent months about a new program being call called “HARP 3” or “HARP 3.0”. So what is HARP 3.0? The short answer is, it is simply an idea at this point. The Obama administration started floating an idea a few months ago about an expansion of the current HARP program. The current Home Affordable Refinance Program (HARP) only applies to conventional mortgages that are insured by Fannie Mae or Freddie Mac behind the scenes. About 70% of conventional mortgages are backed by Fannie or Freddie, but that means 30% of borrowers with conventional mortgages are currently simply out of luck. The primary feature of the new HARP proposal is it would allow those other 30% to take part in the program too.
Don’t hold your breath
The reality of the situation though is that this is an Obama administration proposal that has to be approved by the GOP-controlled congress. That explains why it had no chance of passing leading up to the 2012 election. If Obama wins in 2012 the program has an outside chance of gaining some steam, but even then it would be a long shot because it would require Fannie and Freddie to take on a lot more risky debt and that would be a risk to tax payers. If Romney were to win in November it is not clear what his plans would be to boost the housing markets.
While HARP 3.0 is currently just an idea, HARP 1.0 and HARP 2.0 are up and running. Contact us in the sidebar today to see if you are a candidate for the HARP program or for any other government-backed refinance program now available.