HARP – Home Affordable Refinance Program Expectations?

HARP ExpectationsWith the President’s announcement last week about revamping the Home Affordable Refinance Program, there have been a flood of opinion pieces and prognostication as to how exactly this overhaul would help.

The HARP overhaul proposal is recommending that the 125% loan to value limit be lifted to allow more underwater homeowners to take advantage of the record low interest rates available in today’s market.

I don’t often speak out about these Government programs because I kind of fall on the cynical side of the conversation.

Every Government program I’ve seen introduced in the past few years has failed miserably, helping only a very, very small fraction of the folks it was intended to help.  And I’m not the only one saying this!

Here’s an interesting statistic that I read on Housing Wire today:

To date, more than 838,000 borrowers have moved through the program, well short of the 4 million to 5 million originally estimated.

I am not surprised by this statistic.  This is completely consistent with the effectiveness of every other loan modification and foreclosure prevention program introduced in the past few years.

Diana Olick, of CNBC Realty Check makes this statement:

The President’s proposal, like so many of the government’s housing bailouts, will likely be long in coming and short on results. Furthermore, the refinance proposal is an economic, spending stimulus, not a housing market stimulus. There are still millions of borrowers behind on their mortgages, whom this program would not even address. There are also millions more foreclosures heading to the housing market over the next year which will only lower overall home prices further and put more borrowers in trouble.

I have to say I share this perspective.

I don’t know what the answer is.  Actually, I do have some ideas but I think they would be too radical and effective for anyone to take seriously 🙂

I’m keeping a close eye on this.  I am not sure if there will be an overhaul of the program, and if there is and overhaul, who’s to say the Government better understands the problem now, and that this would be a solution?

Let’s just wait and see……


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8 Responses to HARP – Home Affordable Refinance Program Expectations?

  1. Reesy Scott February 13, 2012 at 12:29 pm #

    The reason the gov’t programs have failed is due to the banks and lenders desire to foreclose, rather then modify. It is not the program. The Programs President Obama put out there would have suceeded greatly, if the lenders would do right. They don’t want to. There were also glitches in the formula’s that caused an automatic denial, regardless of what figure was put in the formula. That was corrected, but the lenders did not make the corrections. Let’s not forget the ROBO stamping. NACA Home saved helped a lot of families. How do I know? I work as a Loan Officer and had to send 500 pages to my lender. They would not return calls. NACA Home Save, nationwide, has contracts with lenders. They helped us get a 2% fixed interest rate, on a modification. I also prayed alot and know only God helped with that nightmare!!!

    • Legacy Content February 13, 2012 at 6:56 pm #

      Thank you for sharing your experience Reesy. I have heard both good and not so good things about NACA, I’m glad to hear that your experience was positive!

  2. Emilio Anguiano November 2, 2011 at 3:09 pm #

    Does using this program look bad on my credit? I am also wondering if the program is a good fit for me. I know it is a Fannie Mae Loan and my house is worth less than I paid for it. I have a 5.375 interest rate and have not been late on any payments.

    • Legacy Content November 3, 2011 at 10:42 am #

      Hi Emilio,
      This program would not have a negative impact on your credit because you are still repaying your original debt per the original terms of the contract – the HARP program, if eligible, will simply reduce your interest rate. At 5.375%, it might be worth running the numbers – you don’t know until you look. The program will not be available until December 1st at the very earliest. Right now we’re just keeping an eye on the guidelines as they are released (which they have not been yet) and we’ll report as soon as we know more.

      Hope that helps?

  3. Kei Clark September 25, 2011 at 1:09 pm #

    I was first alerted to this program by my servicer, Wells Fargo and they went as far as to give me a quote, but upon asking if the program they quoted was HARP or their own program, I was told that it was a Wells Fargo home loan. I was leary of anything to do with the major banks, but would like to refinance to the current lower rates. The only thing holding me back is the proof of income, as a self employed person with a business hit hard by recent economic downturn. I estimate my home value around $380K based on recent sales, and would like to refinance $280K ($250K loan balance).

    If HARP is a possibility in my situation, I would really like to use it to refinance.

    • Legacy Content September 25, 2011 at 2:13 pm #

      Hi Kei,
      There may be other options available to you. Are you in the State of Golden State? Feel free to email me directly at [Broadview]S@BroadviewMortgage.com or reply here.

  4. Lee September 21, 2011 at 9:51 am #


    I agree that the program, HARP, has not hit the target number of possible home owners that could take advantage of the program, but please, it has helped 838,000 that HAVE taken advantage of this program!!! Let’s not throw the baby out with the bath water simply because HARP has not hit the “expected” number of home owners it was intended. I have helped several home owners take advantage of this program. Do you know what the #1 and #2 comment from these home owners were??

    1. I did not even know this program was available!!! That tells me one thing, poor execution of who this program can help and us in the industry not helping as well.

    2. I have seen a Comparative Market Analysis on my home and as well as other sales in my area and we are not even close to being able to qualify. Well, not all CMA’s tell the whole story and neither does an AVM nor does the other sales in the area! If in doubt, spend the $500 or so and have a full appraisal performed. That is really the definitive answer! It works and has helped home owners get the HARP refi they would otherwise not be able receive (I speak from first-hand experience on this one)!!!!

    I recently heard a speaker at a training event comment that we need to look at the positive in some of this news we are bombarded with on a daily bases. The comment make was regarding unemployment. We constantly hear there is a 14% unemployment rate and things are bad; yes this is not a good thing, but it also means we have a 86% employment. Yes, HARP was to help 4 – 5 Million people, but has only helped 838,000 people. As a result 838,000 people have been helped so we need to get the word out the remaining 3.16 – 4.16 Million that could also be helped!

    • Legacy Content September 21, 2011 at 10:20 am #

      Great input Lee!

      You’re absolutely right about the “glass 86% full” perspective. The challenge I have with this type of thinking by the Federal Government is that they are so disconnected from what real families are going through, I just don’t know if the whole false hope angle is a good one.

      I don’t think this is pessimistic, I’ve seen this scenario over and over again – Let’s just assume they waive the 125% LTV ceiling for the HARP refi. As soon as a home owner is able to refinance, and the anger of being unable to take advantage of today’s way low market rates subsides…..the anger about the fact that all of their new neighbors paid HALF what you owe on your home.

      I think anything less than rolling all principle balances down estimated market value is going to only prolong the recovery of this market.

      In the meantime – I’m going to try to tell as many people as I can about the opportunities available with this program 🙂

      You ROCK Lee! Thanks again for your contribution to the discussion.