Modified Home Affordable Refinance Program (HARP)

Potential Impacts of Modified Home Affordable Refinance Program (HARP) Announced by the President   

  • Requires borrower to be current on their loan payments—no other requirements
  • Makes no difference how far underwater their home is
  • Will eliminate appraisals and extensive underwriting requirements for most borrowers
  • FHA, Fannie Mae and Freddie Mac have agreed to eliminate some fees in some circumstances
  • CoreLogic estimates 20 million homeowners could qualify—one out of four homeowners in the country
  • At a $400 per month loan payment reduction ($4,800 per year pre-tax), this potentially could put $96 billion annual in consumers pockets without increasing U.S. government or consumer debt 1 cent – consumers spending that would spur an economic recovery
  • Could potentially keep one out of four distressed properties off the market significantly reducing shadow inventory and expediting a recovery in the housing markets
  • Federal government will collect more income taxes as homeowners will have less interest deductibility
  • Since none of these existing loans had prepayment penalties, all current investors in those loans knowingly had the potential of repayment at any time
  • Economists estimate that these changes will allow an added 1 to 1.6 million homes to be refinanced
  • Assuming a current loan of $200,000, then the HARP modifications would increase 2012 residential lending volume by $200 to $320 billion
  • Prior to this announcement, Fannie Mae had forecast 2012 residential lending to be $958 billion comprised of $467 purchase volume and $491 billion refinance

To read the complete press release from the Federal Housing Finance Agency click here.

U.S. to overhaul mortgage-refinance program: WSJ
"LOS ANGELES (MarketWatch) — The Obama administration plans to announce major changes to a mortgage-refinance program that include eliminating restrictions for those whose homes have fallen significantly in value, The Wall Street Journal reported late Sunday, citing unidentified U.S. officials. The overhaul to the "under-used" program would also end required appraisals and extensive underwriting for most participants, so long as they have stayed current on their mortgage payments, the report said. President Barack Obama is slated to speak on the changes at a speech Monday, the report said."


  1. Nick Katzer

    Of course another Big Government Program to the rescue! What happens to the money that was loaned to folks who now refinance? How are the banks going to swallow the loss. Duh, it will be passed on to the consumer in higher fees and bank charges.

    Oh, one more thing. If you are an investor and you are going to try to refinance a rental property, forget it.

  2. harpusanet

    Good stuff!

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