HARP 3.0: Help for Non-Fannie Mae and Freddie Mac Mortgages

The news on the possibility of implementing HARP 3.0 has kept the country excited especially for experts and of course American homeowners with underwater properties. It has become their most awaited savior that would rescue and help them refinance despite their homes declining value.harp 3

What is great about the new HARP is it would target underwater properties that were not bought by Fannie Mae or Freddie Mac. Meaning, it can now be accessed by more Americans which were not covered before by the original HARP.

The first version of HARP or Home Affordable Refinance Program was created to help responsible homeowners who were not late on their mortgages but owed more than their homes’ value. A revised version was created in 2012 and was called HARP 2.0 where it waived the loan-to-value requirements and made mortgage more affordable.

With the possibility of implementing HARP 3.0 as what President Obama mentioned in his State of the Union Address; this new version of HARP would allow homeowners to take advantage of historical low rates by refinancing even if their mortgages were not owned by Fannie Mae or Freddie Mac.

It is said that this was due to the failure of the Responsible Homeowner Refinancing Act of 2012, so Senators Robert Menendez and Barbara Boxer have re-drafted their refinance bill that was designed to underwater American homeowners to get lower mortgages.

The revised Responsible Homeowner Act of 2013 proposes to eliminate certain closing costs which includes the cost of home appraisal and to make it easier for homeowners to qualify and simpler to “change service providers” through the Home Affordable Refinance Program or HARP.

The new HARP is said to expand its coverage, regardless of whether you’re employed, unemployed, earning a verifiable income or without wages, the approval of your HARP will not be affected. It will also expand its refinancing options for non-government sponsored enterprise or GSE mortgages and mortgages with a balance of more than $417,000.

fannieIt will also require Fannie Mae and Freddie Mae to create an alternate home appraisal method which do not cost as much as a full appraisal. Furthermore, it is expected to extend the HARP program for another calendar year and is said to expire in December 31, 2014.

Though some experts say that HARP 3.0 will never pass but it is steadily gaining momentum, because not only it is said to refinance mortgages that are not secured by Fannie Mae or Freddie Mac, but it will also allow refinancing jumbo mortgages.

We still don’t what would be the fate of this new version of HARP, if it will ever be made official. But until the Washington hasn’t decided on this yet, we will continue to keep on guessing.