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New Hope With Government HARP 2.0 Revisions
There is a feeling of new hope as the New HARP 2.0 Program Revisions details are being reviewed. Unlike the original HARP the new HARP 2.0 Program revisions includes new terms and requirements which will apply to thousands of families who are currently hopeless.
The reformatted HARP program has improvements for the borrowers and for the lenders, the borrowers underwater limit of 125% will probably be deleted, and all the underwater mortgages would be included, the lender are free from the buyback sanction which help many of them from participating with the old HARP program.
“ Although details of HARP 2.0 have not been fully announced, some anticipated improvements are:
In the 1st HARP, the underwater limit was 125%. In HARP 2.0, it appears there will be NO limit.
Fees could be reduced – e.g. an automated appraisal may be allowed vs having to pay for a new report
There will be no “buyback” requirement, where the originating lender would have the possibility of taking back this loan from FannieMae or FreddieMac and having to reimburse them, if the borrowers went into foreclosure.
The buyback requirement in the 1st HARP program caused many lenders not to want to participate, leaving those lenders who did participate with huge, overwhelming demand. Add to that the underwater limit of 125%, and the probability that the appraisal would even further cause the borrower(s) not to qualify because of getting an appraisal that did not give the value to keep the underwater limit at or below 125% – well, you get the picture.
The intended effect of these (and probably other) improvements is designed to enable millions of underwater homeowners to get better terms on their mortgage to help them prevent foreclosure The mortgage must be currently owned by FannieMae or FreddieMac, and cannot have been refinanced under the 1st HARP program. The full details are to be announced by November 15, with applications to be taken beginning December 1″ See original Patch..
Government HARP 2.0 Revisions Cons
Here is another opinion of a mortgage broker who thinks that the new HARP 2.0 revisions are government interventions, that are interfering with the natural way the underwater mortgage housing problem should be solved:
What do you think? Will the new HARP 2.0 Program help or interfere?
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There is a lot of expectations from the Reformatted HARP Program for underwater mortgages owners. At the end of September nearly 30% of the national mortgages where underwater, meaning borrowers had negative equity on their homes. Borrowers were owing more money to the bank than the house it worth.
Reformatted Government HARP Program
The Reformatted Government HARP Program expected to be announced at 14 of November will replace the former HARP program which did not succeed to lift sinking underwater mortgages because the terms excluded too many borrowers from participating in the HARP requirements.
The basic HARP requirement is that the borrowers will be current on their mortgage payments. While this is not a simple task today, even borrowers who qualified for this term could refinance and not lock the low rates due to negative equity – having an upside down mortgage. Because of this the current format of HARP is no solution to millions of house holds.
Read below a review on underwater mortgage situation and Reformatted HARP Program solutions at the Chicago Tribune with the help of the Real Estate site Zillow:
“The numbers are one indication of the demand there may be for the Obama administration’s plan to expand its mortgage refinancing program to homeowners who pay their mortgage on time but have been unable to take advantage of low mortgage interest rates because sinking home values have left them with insufficient equity to refinance their loans.
Officials have said the number of participants in the Home Affordable Refinance Program could double from the current 894,000 by loosening the lender guidelines for government-backed mortgages and removing the current maximum cap of a 125 percent loan-to-value ratio. The program still would exclude homeowners whose loan-to-value ratio is less than 80 percent, but some legislators have called for that to change, too.
Specific details of the program are scheduled to be announced Nov. 14.
It will help some homeowners but a reformatted HARP won’t be a panacea for the housing market,” Humphries said. “There’s no one single overarching policy that’s going to get us out of it,” he said. “The housing economy is not going to get back and operate on all cylinders for four or five years.” Get the full article at ChicagoTribune.com
I think the Government Reformatted HARP Program is not the ultimate solution to the housing problems, yet it is a good step in the right direction. The new Home Affordable Refinance Program might be too late for Obama who is losing popularity, but it will help thousands of borrowers currently with mortgages underwater to float.
Homeowner Evictions For Those Who Can’t Pay Their Mortgage
There is little hope for homeowners who have stopped paying their mortgage payment and sit at home behind closed doors waiting for the bank to force them out. Here are two personal reviews from people who’s business is to negotiate between Banks and Homeowners Who Can No Longer Pay Their Mortgage.
Some homeowners do not pay their mortgage not because they can not, but because the home has lost so much of it’s value (negative equity property), they are requested to pay for property (their home) which is not worth paying for. Unfortunately the restructured Home Affordable Refinance Program (HARP) is too late to help them and they will soon join the dark statistics of the nation’s foreclosure list.
Bank Realtors and Homeowners Facing Foreclosures
“The nation’s, and Brevard’s, economic recovery depends in large part on restoring the housing market. That effort will be slowed by foreclosures, area Realtors suggest.
“If the economy recovers and people have jobs and can pay their bills, we’re fine,” said Realtor Gene Collins, a past president of the Melbourne Area Association of Realtors who handles foreclosure sales for banks and others. “But there are new foreclosures happening every day. (Homeowners) are making an economic decision they’re not going to pay the mortgage anymore. Eventually, that becomes another foreclosure.”
Though there are positive signs in the housing market — through September, sales of previously occupied homes are nearly 16 percent ahead of last year’s pace — the tough times in the real estate and housing markets may linger.
“I hate what I’m doing,” Indialantic real estate attorney Jonathan Lack said. His title insurance company and real estate law practice has adapted to handle foreclosures and loan modifications, and business is booming.
“I’m a transactional real estate attorney who’s had to adjust what I’m doing,” Lack said. “I have people crying in my office. It’s a hard, stressful, sad time. Most of my closings are short sales.” Those are the transactions where the bank accepts a sale price of less than the homeowner owes on the loan.
Lack mostly works to arrange deals between banks and homeowners who can no longer afford their mortgages.
“Within my office the ultimate goal is a graceful exit, as opposed to my client being foreclosed on and forced out,” he said.
“Every so often I get one that’s not a short sale and it’s exciting.” See more on this issue
People should know that going into foreclosure means they will have a negative mark on their FICO report for 10 years! This means not only they will be eventually moved from their home, but in the future when they will want to rebuild their life again, the foreclosure remark will be stamped all over their FICO report.
No sensible lender will risk giving funds to borrowers who fail to pay the mortgage and fall to foreclosure. The credit score would be severely damaged. Choosing an underwater property short sale solution may be a better way to solve this issue between Banks and Homeowners Who Can No Longer Pay Their Mortgage.
There seem to be a simple truth that slips away from the eyes of the decision makers. The is a need for a better Restructured Home Affordable Refinance Program! There are millions of household that work, pay taxes and try to survive the economic earthquake of 2008. All the financial programs are somehow missing the average Joe and his wife.
People are in deep trouble when their home property is underwater, worth less than the mortgage they still have to pay the lenders. This negative equity is a ticking bomb, as the lenders have just as much to lose, if these underwater properties drown in deep (foreclosure)waters. There are not enough new refinancing options for underwater mortgages, as Former U.S. Rep. Bob Clement writes in the review below.
“Recently, President Obama unveiled the restructured Home Affordable Refinance Program (HARP), one of the only programs assisting homeowners who are “underwater” in their mortgages. The program was set up in 2008 to help homeowners refinance, but the restrictions were too rigid.
HARP reforms are improved but still restrictive. HARP applies only to homeowners with Fannie Mae and Freddie Mac loans. To qualify, they must have paid six consecutive months on time. Closing costs and other fees will be reduced. Income requirements have been waived, and insurance can automatically transfer to the new loan.
Other institutional lenders need to find ways to offer more flexibility in their mortgage requirements. Bankers tell me their hands are tied by new stricter federal definitions of qualified mortgages. Perhaps they can set up special loan categories to help young professionals and promising wage-earners become homeowners in spite of their school debts.
I understand the lending institutions’ caution. I sit on the board of directors for a small bank myself, but standards that are too strict will cause more stagnation in the housing market and compound the problem. I believe we have overcorrected the problem that spawned the bubble burst.
We need home mortgage policies that help ordinary families avoid foreclosure.
The rich can take care of themselves, the poor will be taken care of, but who rallies for the middle class? They continue to pay the taxes, funding the programs for those who can’t and those who won’t. We bailed out Wall Street; it’s time we give the middle class some overdue help.” Read More…
Former U.S. Rep. Bob Clement is president of Clement & Associates, a business development firm (www.bobclementassociates.com) He represented the Fifth District of Tennessee 1988-2003.
I think Former U.S. Rep. Bob Clement has touched the subject in the right aspect. The rich will manage, the poor will be taken care off by others (as it was always) but the working class people with underwater mortgages need refinancing solutions better than the Restructured Home Affordable Refinance Program.
Homeowners underwater refinancing option are very narrow these days. Those who have exceeding mortgage balance of their property, know very well the ineffectiveness of trying to refinance. Refinancing options for underwater mortgages are limited because many lenders require some sort of equity in property. The ideal amount of equity for lenders is at least 20 percent.
Even with such constraints, the borrowers have different options, for example, the “Making Home Affordable” program by the government. Below are some new home underwater refinancing options for the borrowers.
Underwater Refinancing Option #1 HARP
Upon meeting a certain criteria, you can secure refinancing through HARP (Home Affordable Refinance Program). This plan allows the borrowers to secure refinancing loan which is 105 to 125 percent of the total value of the property.
Usually, every underwater loan does not qualify for HARP. If you are on your way to foreclosure, or there are felonious payments in the last 12 months, you will be automatically disqualified from the program.
To secure HARP, you must have a rational payment history, good credit score as well as a buildup of present home financing and detailed lender guidelines. Also, HARP is not meant for everyone, while lenders have closed many HARP loans due to various ineligibility issues by borrowers. According to lenders, if HARP refinancing can escape you $300 to $400 of the monthly mortgage payment, it can give you a difference of either keeping or losing your property.
If your score is less than 700, you may need to improve the FICO score, this can save you thousands of dollars and improve your chances to get a YES from the lender. No lender wants to take today unnecessary risks, improving your score by a few dozen points, can be all you need. This can be done by following a simple ‘clean credit guide’, just like this one.
In order to qualify, you should prove your financial hardship. Your mortgage must be owned by the lenders who are signed up with the Treasury. For this program, the government finances up to $1,500 to the lenders to process the loan, however, the lenders have got the ultimate right to approve or disapprove the HAMP application.
HAMP might be a very simple solution for many borrowers, but there are also some very strict HAMP qualification guidelines. Also, the home should be your primary residence, the amount of mortgage should be less than $729,750, your present monthly payments should be more than 31 percent of the present gross income and you must prove the disability or difficulty to make payments.
Upside Down Mortgage Refinancing -Reality Check
The underwater borrowers, who are unable to qualify for the new home underwater refinancing options, should also, realize the fact that these plans do not always work for everyone. Unfortunately, at present there are no underwater refinancing options for borrowers backed by the government.
In spite of these barriers, you should not stop negotiating upon loan modification to your mortgage lender. Many lenders are ready to offer different patterns of loan restructuring as a substitute to the foreclosure, however, these are not backed by the government.
Unfortunately, when facing no new home underwater refinancing options, you should inquire about any chances of a short sale. This means that you are ready to sell your house on market price with the remainder amount of loan absolved by the lender.
A 2004 study made by the Public Interest Research Groups, found as many as 79% of credit reports have errors! You Don't Need To Pay Others Hundreds Of Dollars To Clean Your Credit Report. Scores Lower Than 640 Click Below:
Clean Your Credit Score in 37 Days!($37 Risk Free)
There is a feeling of new hope as the New HARP 2.0 Program Revisions details are being reviewed. Unlike the original HARP the new HARP 2.0 Program revisions includes new terms and requirements which will apply to thousands of families who are currently hopeless.
