Home > Avid Law Center, Loan Restructuring > Will changes to HARP really help?

Will changes to HARP really help?

As the government aims to fix the current housing market, new changes to the Home Affordable Refinance Program announced late last month will do little to help the situation. This week details were announced on the program, shedding new light on who qualifies.

At the start of the program in 2009, the goal was to reach 5 million borrowers and to date just under 895,000 homeowners have been helped. Neil Barofsky, former special inspector general for the U.S. Treasury’s Troubled Asset Relief Program, discusses the changes to HARP and breaks down the anticipated affects in an interview with Bloomberg.

The cap on loan-to-value ratio, once set at 125% for 30-year mortgages and 105% for 15-year mortgages, has been removed. This is one welcomed change for “HARP 2.0” as that cap had been a major roadblock for millions of underwater homeowners in troubled markets.

Qualifications include:

  • Your existing loan must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
  • Your loan balance must be more than 80 percent of your home’s market value.
  • You can have no late payments on your existing mortgage in the past six months and no more than one late payment in the past 12 months.
  • You are ineligible if you previously refinanced through HARP.
Most of these changes are scheduled to take effect Dec. 1, with the fee change coming as of Jan. 3. However, these changes require changes to Fannie Mae’s infrastructure so the impact of the changes may not be felt until March in some cases.

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