The Reformatted HARP Program Will Lift Underwater Mortgages

Reformatted Home Affordable Refinance Program

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

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.

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