Obama’s Refi Plan- Changes to HARP

Home Affordable Refinance Program

The Obama administration is changing a refinancing program so that more underwater borrowers can qualify.
What is HARP?
The Obama administration in 2009 rolled out HARP to refinance borrowers whose loans were backed by Fannie Mae and Freddie Mac and who were current on their payments. The idea was simple: If you were making your payments on time but didn’t have enough equity to refinance, you would be able to lower your rate without having to pay down your mortgage balance or take out mortgage insurance.
Initially, the program was limited to borrowers who owed between 80% and 105% of the value of their homes. In mid 2009, the program was opened to borrowers who owed up to 125% the value of their homes. But a series of unforeseen “frictions” have led fewer borrowers to take up on the offer lower rates. Fewer than 900,000 homeowners have refinanced under HARP over the past 21 years, and just 72,000 of those borrowers have loan-to-value ratios between 105% and 125%.

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President Obama, Real Living Real Estate, Refinancement Plan, Shayla Hope