About Government Refinance and Home Purchase Programs

Beginning on Thursday December 1, 2011 applications for the HARP 2.0 program can technically be started. We say “technically” because as of now no authorized lender has implemented the program.

As we have discussed in the past, the HARP 2.0 program only applies to loans that are currently backed (invested in) by Fannie Mae or Freddie Mac. In addition the Fannie/Freddie loan must have been funded prior to May of 2009 to qualify for the HARP program. For the millions of loans that meet those requirements the HARP 2.0 programs is designed to allow homeowners to refinance to a lower rate without having to add private mortgage insurance (PMI) even when the loan is more that 80% of the current value of the home. The HARP 1.0 program allowed borrowers to refinance up to 125% of the current value of the home but the HARP 2.0 will do away with that 125% limit. In addition the HARP 2.0 will reportedly be available to borrowers who are currently paying PMI on their Fannie/Freddie loan.

Fannie and Freddie have announced that they will not have their underwriting software updated until March of 2012. As a result the bulk of the HARP 2.0 loans will not be able to be closed until then. What remains to be seen is if some lenders will be willing to manually underwrite HARP 2.0 loans before then. We will monitor the situation and report on any announcements regarding that here.

In the meantime we recommend you fill in the contact form in the sidebar to see which government-backed refinance programs apply to your situation.

In 2008 the loan limits on FHA mortgages were increased to allow more borrowers across the country qualify for FHA loans. On October 1st of this year those loan limit increases expired and reverted back to their original levels. After several weeks of debates in congress a bill reinstating those higher loan limits through the end of 2013 was passed and that bill was signed into law by President Obama on Friday. While this change will not affect a huge number of people, it will open up FHA loans to more Americans. To learn what the loan limits are in your county see this web site. (Note: it might take a few days for the new limits to be updated there.)

If you have an FHA loan now or would like to learn more about refinancing into an FHA loan contact us in the sidebar.

The details of the new changes to the HARP program are reportedly going to be released on or before Tuesday November 15th. The release of the operational details is a crucial step in the roll out of the so-called HARP 2.0 program. However the program will probably not be functional on the ground level for several weeks after that.

Please note that the federal government does not lend directly to consumers with this program. Rather the HARP program is outsourced through authorized lenders so the actual implementation of the new program requires those lenders to be ready to originate and fund loans under the new program. Fully implementing new programs like this generally takes weeks or even months.

Contact us in the sidebar to learn if you are a candidate for the HARP 2.0 program or other government-backed refinance programs and to be connected with an authorized lender.

After hitting record lows at the end of September mortgage interest rates climbed slowly but steadily through most of the month of October. Rates increased in October in large part due to the news that Europe had worked out a temporary fix to their debt problems. But as October came to a close the European debt crisis hit a new snag which in turn led investors worldwide to purchase more US bonds which in turn is improving mortgage interest rates again. The excellent rates combined with the recently announced of an expansion of the Home Affordable Refinance Program (HARP) make now an excellent time to look into an government-back mortgage refinance. Contact us in the sidebar to learn more.