HARP 3.0 Updates | New Bill to expand HARP Refinancing
A possibility comes alive for the rumored HARP 3.0 as new bill has been proposed recently by two U.S Senators. The proposal is a version of The Home Affordable Refinance Program or HARP that has already been put in place to help homeowners who are underwater on their mortgage. The Responsible Homeowner Refinancing Act will be similar to HARP but with extended guidelines and reduced fees to help even more homeowners wanting to refinance. The bill still requires borrower’s mortgages be owned by Freddie Mac or Fannie Mae and have on time mortgage payments to be prequalified for the program.
Senators Barbara Boxer and Robert Menendez sponsored a new version after it was previously introduced in May of this year but was not accepted into congress. With additional backing from powerhouse lobbyist groups such as the Mortgage Bankers Association, National Association of Realtors, National Association of Home Builders and the Center for Responsible Lending, the bill has a good chance of making it through Congress.
The bill will allow homeowners the ability to do the following:
- Qualified borrowers will be able to refinance under the revised bill guidelines. If the borrower is above 80 percent loan-to-value they will no longer need to worry about not qualifying for the program or paying more in fees. The benefits of the new bill will be equal for all borrowers who have a Freddie Mac or Fannie Mae loan.
- Borrowers will have the capability of refinancing from their current lender to a new lender without having to be scrutinized with stricter underwriting guidelines or increased costs and less desirable terms. With the new bill going into effect it would enforce the GSEs to equalize the guidelines between their current lender to the new lender.
- GSEs will no longer be able to charge up-front fees when the borrower is refinancing a loan that is already guaranteed by them. The previous HARP guidelines were allowing the GSEs to charge more in fees to borrowers with a significant amount of equity. Since they will no longer be able to do this, this gives the borrower more financial freedom.
- With the new bill, the GSEs cannot require borrowers to obtain a manual appraisal, which can cost hundreds of dollars, simply because they live in an area where homes have consistently been selling. Alternatives to borrowers paying for manual appraisals will need to be seeked out by the GSEs instead.
- The new bill will allow borrowers to refinance without providing proof of employment and income verification as long as the borrower is current on their loan. This will also make the refinancing process flow smoother for both the lender and borrower.
- Another advantage of the new bill is what it will save money for taxpayers by reducing the default rates of existing GSE loans.
“This bill is a win-win-win: homeowners will have more money in their pockets, Fannie and Freddie will see fewer foreclosures, and the housing market and economy will be strengthened. That’s why the Menendez-Boxer bill has such broad support from industry and consumer groups,” as summarized perfectly by Senator Boxer.
For more information about the Menendez-Boxer Bill and HARP 3.0, request information below or check back for future updates.