The Federal Housing Finance Agency announced that the Making Home Affordable Refinance Program has been extended until June 30th, 2012. This is great news for homeowners and the housing market.
Lender guidelines and participation have steadily grown since HARP’s inception. Many homeowners don’t know of the program and need this extra time to refinance their home. I believe this is an excellent decision and should have a positive impact to our housing market.
According to an article from BusinessInsider.com, only 220,000 homeowners have refinanced under HARP where an expected 4-5 million were projected at the program’s inception.
The 220,000 closed HARP loans mentioned in the BusinessInsider.com article is inaccurate. This figure was published by Alan Zibel on March 5th, 2010, over 1 year ago. An article from MortgageNewsDaily.com has indicated that 621,083 HARP refinances were closed in 2010 alone. It’s not the 4-5 million they hoped for but there’s no question that lender participation and consumer awareness have grown.
Here’s a copy of the announcement:
FHFA Extends Refinance Program By One Year
Washington, DC– Federal Housing Finance Agency Acting Director Edward J. DeMarco has announced an extension of the Home Affordable Refinance Program (HARP), a refinancing program administered by Fannie Mae and Freddie Mac, to June 30, 2012. The program was set to expire on June 30 of this year. In addition, Fannie Mae and Freddie Mac will make the following adjustments to their programs: Freddie Mac will exempt HARP loans from their recently announced price adjustments and Fannie Mae will conform their eligibility date to May 2009. The program expands access to refinancing for qualified individuals and families whose homes have lost value. HARP has grown over the past year. In 2010, Fannie Mae and Freddie Mac purchased or guaranteed more than 6.8 million refinanced mortgages. Of this total, 621,803 were HARP refinances with LTVs between 80 percent and 125 percent. This is up from 190,180 in 2009, when HARP began.
Here’s a link to the announcement:
I have two suggestions related to this topic for homeowners:
- One, if I had an investment property, I would try to refinance it as soon as possible. Certain pricing guidelines that benefit investment properties appear to be a “loophole” in the guidelines. This helps investment properties price very well but appear to be designed for homeowners, not landlords. If the FHFA had let those guidelines slide since HARP was expiring soon, they may very well change them now that the deadline has been extended.
- Two, if you have a loan with PMI, this is the chance to let your voice be heard and let the government know that they should loosen guidelines to allow PMI backed loans to be done by outside lenders. Too many people have their loans serviced by lenders who will not do PMI HARP loans or have their loan serviced by a company who does not originate loans at all. These homeowners are well qualified and deserve to have their mortgage refinanced. Being left behind due to an unlucky transfer of servicing to a mortgage company who does not originate new loans is not an acceptable reason for why these people cannot refinance their loan.