The President has been talking up housing during the month of August, 2013. On Wednesday, August 7th, 2013, Zillow CEO Spencer Rascoff moderated a 30 minute segment where the President answered questions from homeowners and homebuyers.
About 30% of the questions focused on the rumors of a HARP 3 underwater refinance program for those that don’t qualify for HARP 2.
The first mention of pushing HARP 3 through Congress is at the 3:15 mark of the video below. At about the 23:30 mark, the President goes so far as to say that passing such a program should be a “No Brainer”.
HARP 3 Changes
The question is….what is HARP 3? What changes? That’s a great question that hasn’t really been answered yet. The President mentioned the bill at committee right now named The Responsible Homeowners Refinance Act of 2013.
Some of the highlights of this program include:
- Allow non-servicing lenders to use “streamlined guidelines” to reduce documentation and cost to consumer
- Remove fannie mae and freddie mac owned requirement to allow any eligible homeowner to refinance
- Further streamline qualifying process making on-time payment history primary factor for eligibility
- Remove requirement for income, appraisal, assets – eligibility depends on payment history
According to a recent story on cbsnews.com, some of the changes we may see with HARP 3 may include:
- Change or remove qualifying “cut-0ff” date. With HARP 2.0, a mortgage has to be sold to fannie mae or freddie mac by June 1, 2009, to qualify. That may no longer be the case.
- Allow HARP eligible homeowner to refinance regardless of using HARP in the past. That is prohibited under the current iteration of HARP.
- Allow homeowners to be late on a payment just once within the six months prior to the refinance. Under HARP 2.0, homeowners must be completely current.
- Relax or eliminate employment and income verifications in place under HARP 2.0.
Getting Ready for HARP 3?
There is no question that a HARP 3 program would be a money saver for many homeowners left with no options for taking advantage of rising, and still historically low rates.
On July 15th 2013, I wrote an article making the case that HARP 3 had less than a 3% chance of being passed. I think I would like to change my tune on that one.
With the President making an effort to push this solution through, I am cautiously optimistic that we will see a HARP 3 program before the end of 2013.
We’re keeping a very close eye on this program and will keep you informed as we hear more. If you would like to receive advance notice about any HARP 3 news, subscribe below be added to this special hotline.