HARP 2.0 – Music to a Homeowner’s Ears?

HARP 2.0 – Music to a Homeowner’s Ears?

HARP 2.0, the name coined by the media, may seem like music to many homeowners’ ears. However, the new HARP program is not a game-changer for the real estate market. When President Obama put the Home Affordable Refinance Program (HARP) into effect in 2009, the intent was to assist borrowers whose loans had been backed by Freddie Mac, Fannie Mae or FHA. The idea behind HARP was to assist those owners who did not have sufficient equity (or even had negative equity) to refinance. The original version of HARP worked with borrowers who were still current on their mortgages and owed as much as 125% of the current value of their home. These people needed a way to refinance their mortgages, and HARP allowed that to happen.

Did HARP Work in the First Place?

Unfortunately, HARP fell short in many ways, but mainly because it was only able to assist a little over 800,000 homeowners. HARP 2.0 is meant to broaden the number of people who can be helped by the program by loosening the eligibility requirements.

While the requirements may have been eased a bit, experts still don’t believe the program will help many more people as its scope is pretty limited. It does nothing for the 6 million plus homeowners who are already behind on their mortgages, but it does allow for more borrowers who are current to use the program.

What is New in HARP 2.0?

The basic structure of the HARP 2.0 program states that FHA, Fannie Mae and Freddie Mac borrowers will be able to refinance no matter how upside down their mortgages are.

  •  Banks will only be required to verify that borrowers have made their most recent six payments and that they have not missed more than one payment within the previous 12 months.
  • Banks have to prove that the homeowners do have employment or some regular source of income.
  • Appraisals are not required as long as there is a reliable automated valuation model.
  • There is no 125% loan-to-value restriction
  • Existing mortgage insurance can be moved over to the new mortgage which makes the process much easier.
  • The program ends on January 1, 2014, which means you must close on your new mortgage by then.

Who Doesn’t Qualify for HARP 2.0?

The new HARP plan still will not assist homeowners who are out of a job or behind on their payments, but it will help those borrowers who are caught not being able to refinance because they owe more than the home is worth. These owners often don’t qualify for short sales or loan modification since they are current on their payments and have income. For those borrowers, HARP 2.0 will provide a welcome piece of good news.

Although HARP 2.0 will not help people who are behind on payments, there are other government and lender-based programs that can help these individuals as well. In these times of economic turmoil, job losses and real estate woes, there are more options available to homeowners who are in trouble than ever before. The key is that borrowers must contact their mortgage companies to find out about all of the possible options for their specific situation.

Even though the new program has expanded guidelines, the scope is still very limited.  It will have little or no impact on foreclosures or the estimated 6.4 million homeowners nationwide who are behind on their mortgage payments.


Lastly, please don’t forget! The Home Affordable Refinance Program is not meant to save a home from foreclosure. If you need foreclosure help, please contact us today!!


Want to find out if your loan is owned by Fannie Mae or Freddie Mac? We can answer any additional questions you may have and help you with your real estate needs.


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San Diego, CA 92101

Phone: 1-888-746-7820